By Rolando Garrido Romo1
This December 1st marks two years since Enrique Peña Nieto became President of Mexico.
It has been two years that the main problems facing the Mexican people have worsened: violence, insecurity, impunity, corruption, repression, inequality, poverty, abuse of the powerful, privileges to a minority and exclusion for most.
The data speak for itself (www.oecd.org):
According to recent data (2011-2014), 3.9% of people in the countries of the Organization for Economic Cooperation and Development (OECD) report having suffered an assault or theft during the past 12 months. However, there are important differences between countries. Rates of Canada, US, Japan, Poland and the UK are below 2%, but reaching more than 6% in Chile, Israel and Belgium, and 12.8% in Mexico (it is the last place in the OECD rating).
In the homicide rate (average number of homicides per 100,000 inhabitants), Mexico ranks second to last with 23.4 homicides (Brazil is the last place with 25.5)2.
In the total score on the security issue (from 0-10), Mexico ranks last in the OECD with a rating of 0.4, while Brazil is the penultimate place with a rating of 2.1 (the first is Japan with 9.9).
On the revenue Mexico ranks third from the bottom of the OECD with a rating of 0.7, above only of Turkey (0.6) and Brazil (0.1). In household disposable income (the one who earns a family in a year, after taxes), Mexico ranks second to last place with $ 12.850 (Brazil ranks last with $10.310).
In the overall rating on education Mexico is in last place with 1.2 (after Brazil with 1.9). In the table of the percentage of graduates of upper secondary education between 25 and 64 years, Mexico has a rate of 36.3%, up only from Turkey and Portugal.
In other areas the rating of Mexico is: housing 3.7 (place 33 of 36); environment 4.5 (place 33 of 36) and health 5.0 (place 31 of 36).
Mexico has been part of the OECD for 20 years, and in these two decades has not left the last two or three places of the table in the main items measured by this organization, and the situation has remained the same in the two years in office of president Peña Nieto.
These data demonstrate that after 26 years of neoliberal governments (if we start counting with the government of Carlos Salinas de Gortari in 1988), most of the Mexican population has not seen any improvement in their standard of living, safety, education, health, income, housing and environment. At best, it has remained stagnant for a quarter century, which is said to have been behind compared to other countries. Two and a half decades lost for most of the people of Mexico.
Economic growth in Mexico is insufficient (the first year of the reign of Peña GDP grew 1.1% and this 2014 will be 2%)3 to give decent jobs to most of the population, and currently 60% of the economically active population works in the informal sector; in addition, according to the OECD, the risk of falling into poverty in Mexico is one of the highest within the organization, because while only between 9 and 11% of the population of OECD countries fall into this risk, for Mexico the percentage is between 19 and 21% (Report All aboard: making inclusive growth possible). For its part, the World Bank has noted that poverty in Mexico affects 52% of the population, a percentage that has not changed in the last 20 years.
However, the 2014 census for billionaires who makes the Swiss bank UBS (UBS Billionaire Wealth and 2014)4, Mexico was ranked at number 21 among 40 countries with the highest number of billionaires. Adding the resources of the 27 individuals and families considered in the study, together with a combined fortune of 169 billion dollars (14% of GDP in Mexico); in addition the number of billionaires rose from 22 in 2013 to 27 in 2014 (an increase of 23% when the economy does not grow above 2% per year).
Peña Nieto's government maintains the economic policy that has been implemented in the country for a quarter century, which favors the concentration of economic growth in a minority of plutocrats, who have enough power to decisively influence the political process and therefore the kind of policies that are implemented in the country.
The governments of the PRI and the PAN5 who have ruled over the last 30 years, have begun welfare policies toward the poor, so that poverty does not overflow uncontrollably, through programs such as "Solidarity" (Salinas), "Opportunities" (the PAN governments) and now "Prospera" (Peña). None have decisively impacted the lives of the majority of the population, and conversely, other policies related to economic policy (removal of subsidies on energy, increased VAT and withdrawal of the state in education and health, leaving the market cater to growing segments of the population in these areas) have nullified the few benefits of such welfare policies.
With regard to corruption, according to Transparency International (Transparency.org), 52% of the population in Mexico considers that in the last two years has increased "a lot" corruption in the country, and another 19% considers that has increased. Also, 90% believe that the police are corrupt, 87% believe that officials and public servants are also, 91% think so of leaders and leading representatives of political parties and 80% of members of the Judiciary.
Here it is worth mentioning that the greatest corruption scandal just give out in the country in the month of November this year, when CNN in Spanish reporter, Carmen Aristegui, through her website Aristeguinoticias.com, announced that president Peña’s wife, former actress of the T.V. consortium Televisa, Angelica Rivera, owns two properties valued at more than $7 million in one of the most expensive areas of Mexico City (Lomas de Chapultepec), and that in one of them had just built a huge mansion (now known as "the White House of las Lomas")6, through the construction company TEYA belonging to GRUPO HIGA, owned by businessman Juan Armando Hinojosa Cantu.
Cantu Hinojosa’s companies were during the government of Peña Nieto in the State of Mexico (2005-2011), the most favored in public works contracts (almost 2 billion dollars), and during the presidential campaign of Peña Nieto, Hinojosa Cantu rented his private planes to Peña for his travels.
Cantu Hinojosa and his HIGA Group was the group associated with China Railway Construction Group, a Chinese company that won the contract to build the fast train between Mexico and Queretaro, with an estimated investment of more than 50 billion pesos ($3600 million), being the only company that was registered in the public bid for the concession to build the railway.
Shortly before traveling to China to the APEC Summit, Peña Nieto revoked the concession to the company, since it was learned that it was about to be released information about the properties of his wife, and the relationship of these properties with the construction company of Cantu Hinojosa.
Following this scandal, the president's wife, Angelica Rivera, who was an actress for 23 years in Televisa (before marrying Peña Nieto in 2010), was forced to disclose the country, through television, how she acquired these expensive properties.
The explanation was that Televisa paid a "settlement" of her contract for 88 million pesos ($6,285,000), and thus was able to acquire her first property in Las Lomas; while the second, which is on one side of it, she is buying it to the construction company TEYA in monthly installments (until now, she has paid 14 million pesos).
The "explanation" of Mrs. Rivera (who made it in a scolding tone and "outrage" because her integrity was questioned) was a disaster, because in Mexico everyone knows that Televisa came to "rescue" Peña Nieto, and that the quid pro quo with Hinojosa was evident, who many believe "paid" the contract award of the fast train (and perhaps earlier contracts in the State of Mexico, or other future ones under President Peña presidency) with the mansion.
In any case, if Televisa "paid" that fabulous sum to an actress who nobody in Mexico consider her one of the most famous and important of the country (the highest sum Televisa paid for a multiyear contract went to Gloria Trevi, and only were 8 million pesos)7, it was not for services rendered to the company, but as part of the "buy" that this company made of the services of the new husband of Mrs. Rivera (as described in detail in the film of recent release, La Dictadura Perfecta – The Perfect Dictatorship-, where the filmmaker Luis Estrada describes how a large television consortium in Mexico manufactures the candidacy of a corrupt and mafia governor, and takes him to the presidency of the Republic).
With regard to violations of human rights, the government of Peña is now being questioned nationally and internationally, as was the one of Calderon Hinojosa (2006-2012).
The involvement of governments, police and members of the armed forces with organized crime has reached intolerable levels, even for a very condescending and permissive Mexican society on this issue, as the case of the 43 students in the rural normal Ayotzinapa8 that were kidnapped by municipal police of Iguala and Cocula (state of Guerrero) and delivered to the cartel hitmen known as Guerreros Unidos, to be tortured and killed, was the straw that broke the camel and sparked nationwide protests and protests from international organizations and NGOs around the world.
Also the Tlatlaya (State of Mexico) event has impacted heavily on the government of Peña Nieto, since in June 30, 2014 a group of military massacred 22 young in a cellar of the municipality, arguing that they were criminals.
At first both the state government and the federal government, supported the version of the Army, that the youth died during a "confrontation" and the much discredited National Human Rights Commission (CNDH) endorsed this version.
However, it had to be a US magazine, named Esquire, who took statements from several witnesses, which revealed what had really happened: an execution by the Army battalion who participated in these events. It was only then (September) that the case was resumed by the Attorney General's Office and the CNDH, leading to the arrest of 7 military who participated in this massacre.
Both cases, the Ayotzinapa-Iguala and the one of Tlatlaya, and the one of the "white house of Las Lomas" have cornered the government of Peña Nieto, who has started to react violently to the just demands of the Mexican society, not only for clarify and punish these acts of impunity and corruption, but to change a rotten system that only serves the interests of politicians and business groups obscenely rich, who do not care about the fate of the majority of Mexicans.
Thus, Peña began to change the narrative about the demands of the people for justice9, to the condemnation of "violent" groups of hooded men, whom during demonstrations by the case of Ayotzinapa, burned public buildings in Guerrero, Michoacán and Oaxaca and set fire to the front door of the National Palace in Mexico City (these persons could be professional provocateurs paid by the same federal government).
Thus, Peña Nieto and his cabinet members (Secretaries of the Interior, National Defense and the Navy) and the head of government of the Federal District (the Maxico City Mayor), have been trying to turn the situation, noting that the real problem is "the violent groups" who do not want peace and attack the rule of law.
They accuse them of trying to "destabilize" the government, and hence them being the main threat to the country; when the vast majority of the population has been demonstrated peacefully and is demanding a thorough clean of a corrupt political system, linked to the drug cartels and promoting a "crony capitalism", where only those close to political power and the small group of plutocrats who dominates the economy (with their transnational allies), have all the privileges and guarantees, while the people suffer from poverty and repression.
On November 20 (the day the start of the Mexican Revolution is commemorated), thousands of people, families, young, old, women and children marched peacefully to the Zocalo (main square) of Mexico City, demanding justice for the 43 Ayotzinapa missing.
After the demonstration, when there were still several thousand people in the Zocalo, hundreds of federal and Mexico city police attacked the crowd, without provocation, beating and abusing all people in their path, with the obvious intent to terrorize protesters and give a lesson to the people who want to express their dissatisfaction and complaints.
Eleven people were unjustly arrested and have now been imprisoned in distant prisons of Mexico City, which is triggering a new movement for their release. A large group of intellectuals and personalities are starting a movement to demand their release and punishment for the authorities responsible for this brutal repression.
Peña Nieto and Miguel Angel Mancera (head of government of Mexico City)10, have pointed out that the actions of the authorities were “correct” and they do not think to rectify.
So the government response is hardening, because it has no substantive responses to the demands of the population, and although these days Peña will propose the signing of a "pact" to the legality and the rule of law (one of several that have been signed in recent years and have remained on paper), the reality is that his government has demonstrated its repressor mood, tarnished by corruption, abusive and subordinate to Mexican billionaires and large transnational corporations, which will deepen the great national problems and eventually will cause a violent awakening of the dispossessed of Mexico.
-------
Notes:
1 independent political analyst (analisispolitico-rgarrido.blogspot.mx). Mexican government civil servant for 20 years (1988-2008); national journalism award 1989 (club of journalists of mexico). Internationalist (national autonomous university of mexico). Contact: rgarrido63@outlook.com
2 Although Brazil is not part of the OECD, there is an agreement to include statistics in studies of the organization.
3 Bancomundial.org
4 Billionairecensus.com
5 Revolutionary Institutional Party (center-right) and Action Nacional Party (right).
6 “The design of the residence was in charge of Mexican architect Miguel Angel Aragones and his photos are still exhibited in www.aragones.com.mx, entitled Casa La Palma.The blueprint of the house is available on the website archdaily.com, bearing the logo of Aragon and located on the street Sierra Gorda. They also show a date: October 2010, a month before Peña Nieto and Rivera got married "(Aristeguinoticias.com)
7 Regeneración.mx
8 See State Crime in Iguala, Guerrero (Mexico), by Rolando Garrido, article appeared in The Vineyard of the Saker (Vineyardsaker.blogspot.com) last October 18.
9 Recall that in Mexico, according to the National Institute of Statistics and Geography (INEGI.org.mx), crimes go unreported and unpunished reach 95%. That is 95 out of 100 crimes in the country go unpunished.
10 Linked to the leftist and discredited Party of the Democratic Revolution (PRD), who postulated and sheltered the mafioso mayor of Iguala José Luis Abarca and his wife Maria de los Angeles Pineda, and the ousted governor of Guerrero, Angel Aguirre. Mancera is linked to a group of businessmen who control public works of the Federal District, which have been enriched with concessions such as the imposition of parking meters in thousands of streets and with contracts for building works, poorly made in the roads of the city; also they have managed to change the "land use" of residential areas to build malls and office buildings. Just 26 November PRD founder and three-time presidential candidate (1988, 1994 and 2000), C. Cárdenas resigned from the party for all these scandals.
Sunday, November 30, 2014
Is Bezler really naive?
"A united federated Nazi-free Ukraine?"
Please, that train has left the station.
Total fantasy at this point"
This issue is one which divides many sincere and good people and which I rarely see addressed directly. And yet, it is a crucial one. Today, I want to address is head on.
The realistic argument (version one)
As Otto von Bismarck said, "politics is the science of the possible". It is all well and dandy to hope for the best, but unless you are delusional or believe in magic-thinking, you have to prepare for the worst and settle for anything in the middle. There are plenty of conflicts which end in some kind of compromise which neither side likes, but which both sides accept simply because the alternative is even worse. And as Andreas Walsh correctly points out, a "united federated Nazi-free Ukraine" (to use Bezler's words) is a very tall order. In fact, there are growing signs that the support for the so-called "anti-terrorist operation" (ATO) is *growing*, that the zombificaton if the Ukrainian people is very successful. For example, just two days ago I was watching yet another videoconference between the some citizens of Kiev and some citizens of Donetsk and I was horrified to see that the folks from Kiev still seriously spoke, apparently with all sincerity, about the "Russian army being involved in the battles in Novorussia". As for the latest Ukie Rada, it is chock-full of Nazi field commanders, death-squad leaders, clearly Nazi politicians and, of course, oligarchs. The truth is that there are no signs of even a slight de-Nazificaton in the Ukraine, quite to the contrary, all the signs are of a rapid and strong Nazification of the Ukrainian society.
That is all true, but that is only part of the picture. A small part.
The realistic argument (version two)
The big problem with the realistic argument above is that is is completely focused on the short term. Worse, it replies to the wrong question which is this: "are there any signs of de-Nazification in the Ukraine or not?" The correct question is very different, and it is this one:"is a Nazi regime in the Ukraine viable?". That is also a realistic argument, I would argue more realistic than the first one. To answer this question, we really need to answer to sub-questions:
a) Is a Nazi regime in the Ukraine intrinsically viable? That is, in the best of external circumstances, could a Nazi regime remain in power in the Ukraine? In practical terms this means this: can the Nazis prevent the total "somalization" of what is left of the Ukraine? Could they, if given enough support from abroad, stabilize and somehow rebuilt some form of statehood?
b) Even if a Nazi regime in Kiev is viable, can the countries around the Ukraine accept a Nazi Ukraine as a long-term neighbor? After all, Hitler was never voted out of power, it took the Soviet military (with some late assistance by the Anglo powers) to get rid of him. I would argue that there are some regimes which are inherently so terrible that nobody can ever accept them (ISIS for example).
Now let's begin by the first question.
I don't think that anybody will deny that the Ukraine is a sinking ship. The Ukrainian economy is gone, finished, dead. There is no money left, no cash, no gold. Right now, the Ukraine is literally "coasting by inertia on an empty tank" and when it finally comes to a standstill things will get really, really ugly. Right now, the regime in power is busy doing all sorts of very "patriotic" but utterly useless things. They are re-writing history books (even though they lack the money to print them), they are accepting non-citizens in top government positions (Americans, Poles, Germans, Lithuanians, Georgians, etc.) and they are changing the name of WWII. Great stuff, for sure, but it is painfully clear that they Junta has no plan to fix the economy and that it won't even pretend. So we are dealing with a sinking ship whose crew is not even pretending to make an effort to prevent her from going to the bottom of the ocean. How viable is that?
Now let's look at the second question:
It is also undeniable that neither Europe nor Russia can simply turn away from the Ukraine like they have from sub-Saharan Africa and pretend that it does not exist. No matter how much the Ukraine will end up resembling Somalia, the Congo or Liberia, the Ukraine does exist, millions of people live there, and they don't want to die. And they have guns, lots of guns. So no matter what the politics are, the EU and Russia will have to rescue the Ukrainian people and neither side has the means or the will do to so alone. That, in turn, means that both sides have a veto power on any rescue plan for the Ukraine. Including Russia.
Russia, by the way, has the option of rescuing only the Donbass, which is the richest and best educated part of the Ukraine anyway, and leave the rest of it to the EU bureaucrats. Russia is also far more capable of isolating herself from a "africanized" Ukraine then the EU. In other words, the EU is far more threatened by chaos in the Ukraine than Russia, and far less capable of dealing with the consequences of that chaos than Russia. And the Russians understand that.
Last, but most certainly not least, no matter who is in power and no matter what the politics of the situation, geography dictates a simple reality: Russia will always be the Ukraine's biggest trading partner. To think otherwise simply ignores the nature of market forces. In other words, any, and I mean any, plan for the reconstruction of the Ukraine will have to center on the reestablishment of economic ties with Russia.
All of the above can be very simply summed up like this: in the long run, no regime in Kiev is viable unless it has the support of Russia. It is really that simple.
Of course, in the short term and even mid term, the AngloZionists can prop up a Nazi regime in Kiev, but in the long run this is futile, they simply don't have anywhere near the resources needed to make that happen.
Pretend wars and real wars
The recent flurry of pretend-wars presented to us by CNN have resulted in a complete misconception by the general public of how real wars are fought. We are used to the US attacking, the "bad guys" shooting something back, then the US wins, and everybody goes on to the next pseudo-war. This is not how real wars happen.
First, real wars take years to resolve. I don't mean pseudo-wars like Desert Storm or the bombing of Serbia. I mean *real* wars. Like WWI and WWII. Or the US war against Japan in the Pacific. Or the Korean war (which technically is still ongoing).
Second, in most real wars the attacked side is mostly unprepared to defend itself, hence the attack. This is very true of Russia, as some of correctly deduced from the Khazin Q&A: by 2014 Russia was not ready to fight the AngloZionist Empire (Russia would have preferred to have the conflict happen in 2020). But when you get attacked, you don't get to chose the time of the attack, that advantage is inherently for the attacker.
Third, because of this, most real wars begin by a retreat of the attacked party. That directly flows from the second point above. Right now, Russia has "retreated" to less than the full Donetsk and Lugansk regions and she had to "give up" not only most of historical Novorussia, but the entire Ukraine. This is normal and entirely predictable. It is, in fact, quite amazing that the entire Ukrainian military has not managed to subdue two fairly small regions.
But anybody who seriously believes that this is were this war will end is completely naive and does not understand what is at stake here: the very existence of Russia as a nation and a state. Russia will never ever allow this conflict to just freeze anywhere near the current line of contact. In fact, Russia will never allow a Nazi regime in Kiev to remain in power and, as I have explained above, Russia does have the means to prevent that.
The old folks in the Donbass who immediately compared the current war to WWII are correct. In both cases, these wars were about the very survival of Russia not only as a nation and a state, but even as a civilizational realm. The fact that WWII was fought mainly with the German Wehrmacht while the modern war is fought primarily by advanced propaganda techniques makes absolutely no difference. In both cases we are dealing with an attempt to destroy "Russia" in the largest sense of the word. Having met a lot of people who lived through WWII, including Russians who lived in Germany, and having studied the history of that war, I would argue that today's level of russophobia is even worse then during Hitler's times. At least during WWII most Germans were not brainwashed into hating Russians (that kind of crap was only believed by NSDAP Party members, and that not even by all!), whereas nowadays the russophobia has become generalized and completely hysterical, especially in the USA and the Junta-controlled Ukraine.
If you can, read the Ukrainian nationalist press, listen to their speeches, read their websites, including social ones, try to expose yourself to as much real Ukrainian nationalist thought as you can and you will come to realize a simple thing: at its very core, the "Ukraine" is nothing but an "anti-Russia". The Ukraine as a concept does not have a positive content, in fact, it does not even have any inherent reality. The Ukraine is only anti-Russian, it is defined by its opposition to Russia.
Historically, the Ukrainian project was first created by the Papacy as an "anti-Orthodoxy", but following both the decline of Christianity in the West and the rise of nationalism the "Ukrainian project" turned from being primarily anti-Orthodox to its modernized, secular, version - being anti-Russian.
Just like Judaism is, in historical, cultural and religious terms, nothing but an anti-Christianity, so is "Ukrainianism" just an "anti-Russism". You think that I am kidding?
Just look at the freaks in power in Kiev: US-born immigrants, Jewish oligarchs, bona-fide Nazis, Uniat priest, "Gay-rights" activists, death-squad commanders and pro-European students. Tell me, is there any idea, any real value which unites this freaks zoo? Only one: hate, rabid hate for Russia.
Realistic realism
The ontological relationship betwen Russia and the Ukraine is similar to the one of a electron and positron: combined the explode and release a lot of energy (in the form of violence, hopefully without gamma-rays). The good news for Russia is that it's mass of matter is way bigger than the mass of the Ukrainian anti-matter, by several orders of magnitude. In plain English this simply means that the "Ukrainians positrons" (the real hardcore Russophobic Nazis) will lose, at least in the long run. Russia's mass is bigger in economic, demographic, geographic, intellectual, cultural, social, spiritual and, of course, economic terms. The Nazis don't stand a chance.
So Bezler, far from being naive, is simply looking further in the distance. Of course, the immediate task at hand is to protect Novorussia and allow it to survive the Winter. Then the short term task will be to rebuilt Novorussia (which you should think of as "liberated Ukraine" as opposed to "occupied Ukraine" i.e. Banderastan). The mid term task will then be do reach some kind of deal with whoever is in power in Kiev which will provide temporary but good security for Novorussia. Lastly, the long term task will be to apply the correct political pressure to covertly foster a process of de-Nazification of the Ukraine while appearing to be doing almost nothing (let the Ukies think that they are "de-Nazifying themselves").
Yes, this will take years, just like any war does. But there is no other solution. It is the hight of naiveté to believe Russia can afford to live next to an "anti-Russia", nevermind the tiny Novorussia. And, finally, the people of the Ukraine, most of them at least, deserve so much better than to live under a Nazi regime! Yes, the Imperial propaganda today appears to be winning, but the first cracks are already appearing, especially in Europe, and the more the freaks in Kiev show their true face, the harder it will be for the Europlutocrats to sell them as the "good guys" to an already impoverished and mostly hostile European population. This will be just as with the "heroic Afghan Mujahideen" who began as "freedom fighters", but who were then downgraded to "Islamic Fundamentalists", then to "al-Qaeda terrorists" and now "ISIS Über-villans".
After all is said and done, and the dust settles, and the war is over, two things will remain: the fact that the Ukraine is an artificial entity and the fact that nobody will want to re-start that war. In theory, breaking the Ukraine up into several parts is possible, but presents huge risks: the issue of borders is potentially the best way to restart violence and terror. A far better solution is to make sure that each region is allowed to maintain and develop its identity. So for all these reasons, a "A united federated Nazi-free Ukraine" is not only a possible solution, it is the only solution.
Bezler is right.
The Saker
Saturday, November 29, 2014
Very interesting statement by Bezler
Bezler sure is a strange guy and I have to honestly say that the more I see him, the more I like him. Yesterday he sure made one interesting statement. Not only does he hint that he is speaking from the Poltava oblast, deep inside Ukie territory. Better, he also says that Poroshenko used to sell weapons to the anti-Nazi insurgents. Finally, and very much in line with his previous statements, he also clearly indicates that he does not believe in a "Novorussian solution" and that he stands for a united federated Nazi-free Ukraine allied to Russia and Belarus. I fully agree with him. That is the only viable long term and *real* 'solution' to this war.
To me the most amazing statement is that, if he is not just messing with the Ukies, he is speaking form the Poltava Oblast. Since he is clearly no there for sightseeing purposes the only possible explanation is that he is organizing the underground resistance there. If so, this is very very good news. Still, chances are very hight that Bezler is messing with the Junta's brain (he does have a record of doing so, remember the fake executions of prisoners to show that he meant business?), so my guess is that he is somewhere in the Nazi underground, but not necessarily in the Poltava Oblast. Still, it is one thing to be a military commander and a totally different one to be an underground organizer. I wonder if Belzer was in the GRU before the war. Does anybody know?
Anyway, see for yourself.
Cheers,
The Saker
To me the most amazing statement is that, if he is not just messing with the Ukies, he is speaking form the Poltava Oblast. Since he is clearly no there for sightseeing purposes the only possible explanation is that he is organizing the underground resistance there. If so, this is very very good news. Still, chances are very hight that Bezler is messing with the Junta's brain (he does have a record of doing so, remember the fake executions of prisoners to show that he meant business?), so my guess is that he is somewhere in the Nazi underground, but not necessarily in the Poltava Oblast. Still, it is one thing to be a military commander and a totally different one to be an underground organizer. I wonder if Belzer was in the GRU before the war. Does anybody know?
Anyway, see for yourself.
Cheers,
The Saker
Thursday, November 27, 2014
Mikhail Khazin Q&A with the Saker Community
Dear friends,
It is a huge pleasure, and honor, for me to present you today with the Q&A between Mikhail Khazin and the Saker Community. For those who might have missed it, here it is (including a biography of Mr Khazin):
http://vineyardsaker.blogspot.com/2014/10/exclusive-mikhail-khazin-q-with-saker.html
This was truly a massive effort, not only on the part of Mr. Khazin to whom I am immensely grateful for taking the time to reply in detail to so many questions, but also on the part of a lot of volunteers from our community. In the words of the Russian Saker Team Leader, Marina,
Furthermore, my thanks also go to you, members of our community and readers, because 500 questions is truly a fantastic proof of the vibrancy and involvement. I am sure that we must have beaten some kind of "interview record" with that kind of questions.
Finally, here are the names of those who did the really hard work:
Editing
It is a huge pleasure, and honor, for me to present you today with the Q&A between Mikhail Khazin and the Saker Community. For those who might have missed it, here it is (including a biography of Mr Khazin):
http://vineyardsaker.blogspot.com/2014/10/exclusive-mikhail-khazin-q-with-saker.html
This was truly a massive effort, not only on the part of Mr. Khazin to whom I am immensely grateful for taking the time to reply in detail to so many questions, but also on the part of a lot of volunteers from our community. In the words of the Russian Saker Team Leader, Marina,
I just wanted to say couple words about the project and our team.I personally share exactly the same feelings of gratitude as Marina and want to join in her expression of thanks.
I believe this was first truly communal project. It was done entirely by the fantastic members of our international Saker community. We received over 500 questions from our readership. A group of volunteers helped to sort them through, reformat and edit in a way that allowed us to keep as many original questions as possible while at a same time keep them short and manageable both by M. Khazin and the translators. The volunteer response was overwhelming and very professional.As Russian I cannot overstate my gratitude to all these wonderful people around the world who time and time again demonstrate their compassion and solidarity with Russia. My Motherland once again goes through trying times and so does the rest of the world. We are in it together. We need to stay strong and united in the face of evil who has no nationality and no borders. To fight evil we need to erase borders in our hearts and extend hands to each other and especially to those of our brothers and sisters who are in most need of our love, compassion and support.Thanks Saker for giving us the platform to do it,Marina
Furthermore, my thanks also go to you, members of our community and readers, because 500 questions is truly a fantastic proof of the vibrancy and involvement. I am sure that we must have beaten some kind of "interview record" with that kind of questions.
Finally, here are the names of those who did the really hard work:
Editing
Heather, Kristin, Michael, Paul, Patricia, Hugh, Joe
Translation
Yulia, Gideon, S, Marina
Considering the importance of this document, I have decided to try to make it as easy to access, copy and distribute as possible. First, I have made it available in 4 formats: ODT, PDF, HTML and DOCX. Second, I have uploaded it to both the Internet Archive and Mediafire. Here are the links:
Third, you will find below the text pasted in from the HTML file.
I hope that you will find this Q&A interesting and, if you do, please let us know because we are considering doing something similar with another well-known Russian personality. If you want this to happen you can do the following: circulate this Q&A and post it wherever you want (I licensed it as "public domain"), link to this post and post your comments and reactions in the comments section below. Please let Mr Khazin and all those volunteers who worked to make this Q&A in English possible know that you appreciate their dedication. After all, how often do you get to directly ask a question to a top level expert who truly knows not only Russia, but also all the "behind the scenes" Kremlin politics?
Kind regards to all,
The Saker
PS: if you repost this Q&A elsewhere, especially if you translate it (which I encourage you to do) please let me know!
*******Mikhail Khazin Q&A with the Saker Community*******
Central
Bank, Banking
Questions
Pertaining
to the Russian Central Bank. Who owns it and who controls it and who
profits from it? Do foreign interests have a role to play
within it and the bank's ability to inject liquidity into the Russian
economy? Can the Russian government instruct the Russian central bank
in policy decisions? Can they create an alternative to western based
financial institutions like SWIFT, Visa etc. to a system based on
rubles?
How
is Russia’s national money supply structured presently and Why is
the Russian Central Bank still depending on accumulation of US
dollars before issuing Ruble’s and if this policy will change in
the future, how will that affect financing of the Russian national
economy from domestic sources like from Sberbank instead of relying
on foreign investment?
T1,
Princeton NJ
Malcolm
Donald
James,
Canada
Vic,
Northern Ireland
Roxz,
Sweden
Colin
McKay Australia
Answer
There
is a law that states that the Central Bank is independent of the
government. Theoretically, the Central Bank has the right to set its
own monetary and money creation policy. However, there are two
limitations. The first is the IMF policy. Since the Russian
Federation signed an agreement with this organization, the Central
Bank sees itself as the main instrument for the implementation of the
agreement. Of course, it is largely determined by personalities -
while the head of the Central Bank, Gerashchenko, was indeed a
distinguished banker and statesman, the Central Bank's policy was
relatively independent of external sources; with Ignatiev and
Nabiullina the situation has changed and the latter leaders try not
to argue with the IMF.
The
second limitation is the National Banking Council, which includes
several representatives from the President Office, government and
Parliament. A longstanding Russian Finance Minister, Alexei Kudrin,
who is not only a personal friend of President Putin but is also
close to the IMF Russian expert, played a key role on the Council
until recently.
Today,
the situation is gradually beginning to change. It is already clear
that the old policy of the Central Bank (that reflects the vision of
the IMF in its most orthodox form) does not produce the desired
effect and there is a growing criticism in the country of the policy
of the Central Bank and the government. However, so far, the
leadership of the Central Bank is withstanding this public criticism
and does not intend to change its policy. At the same time, the
government keeps pressure on the Central Bank to achieve specific
results for itself. In particular, the devaluation of the ruble in
the last two months is largely due to the fact that the government
has too optimistically promised economic growth, which is clearly not
there. An attempt was made to stimulate it with the Central Bank
agreeing to go against its core mandate, which requires ensuring
stability of the national currency’
The
Central Bank’s investment policy is similarly pulled by the
opposing forces of IMF rules and the country’s economic needs.
During Gerashchenko’s tenure, the Central Bank was actively
increasing domestic capital (from late 1998 until 2003, the money
stock M2 increased approximately 10-fold relative to GDP, from 4% to
40%, and about 15 times in absolute terms). The post-Gerashchenko
Central Bank has been pursuing a strict policy of keeping the ruble
from becoming an independent investment vehicle (in compliance with
the principles of the Bretton Woods system, in which the dollar
should be the only investment source). It has become clear today that
there won’t be foreign investment in Russia at a significant scale
and therefore it is necessary to stimulate the ruble investment
process. However, the current leadership of the Central Bank refuses
to take any steps in this direction. Thus there is a reason to
believe that the management of the Central Bank will change in the
medium term.
Gold,
Gold currency
Questions
Distinguished
Western economists have pointed out that for years naked gold short
selling through manipulation of paper contracts have been used to
prop up the United States Dollar and Western allied-currencies
against the threat of greater depreciation versus gold. Can Russia
and China break the West's gold shorting scam?
Would
this be an effective way for Russia to retaliate against the
Western-Saudi economic warfare that is driving down the ruble and oil
price?
In
particular, is there any serious likelihood Russia and China could
coordinate to take delivery of large quantities of physical gold at
the newly opened Shanghai Gold Exchange in order to create an
arbitrage between the fake, naked short created paper gold price on
the COMEX London market and in Shanghai, resulting in the end of the
COMEX as a serious vehicle for gold price discovery that the central
bankers can manipulate? (In other words, breaking the West's
quasi-monopoly on 'price discovery' in the precious metals market, of
which Russia and China are the world-leading producers).
For
many years gold analysts like Dr. Jim Willie and 'King World News'
have suggested Russia and China have been willing to tolerate the
Western manipulation of gold because this has created a fantastic
buying opportunity for Russia and China to stockpile the strategic
metals at a huge discount. But with the COMEX price being below the
Russian if not Chinese mining cost of production at what point do
Moscow and Beijing defend their long term gold mining interests
(e.g., Magadan miners in Russian Far East) and corporations from
predatory undercutting?
Does
the Moscow economic elite see the gold price as an Anglo-American
weak spot, to hit back at the West for trying to drag down the ruble
and the oil price?
What
chances are there of the BRICS nations using a debt-free or
gold-backed money system?
Will
gold replace the USD as the world reserve asset and unit of
settlement for international trade?
James,
USA
Corto,
Netherlands
Mcbuffalo,
Arizona
NotRelevant,
The Netherlands
James
Bond, Australia
bob
kay
Answer
It
had been clear to many economists for a long time that the role of
gold in the world will grow and, most likely, will return to its
position as a single measure of value. In particular, we wrote about
the current crisis back in 2004 in our book "The decline of the
dollar Empire and the end of the ‘Pax Americana’.” There's a
whole Chapter devoted to the role of gold and its manipulation.
However, Russian economic leaders close to the IMF ignored this
position at the time. This only began to change in the last couple of
years. China has been serious about gold for almost the entire last
decade and is now actively preparing for a potential transition to a
"gold standard," at least in economic relations between the
so-called "currency zones," which, in our opinion, will
emerge after the single world dollar system falls apart.
But
Russia and China cannot stop these manipulations, because the price
of paper gold is determined on the speculative dollar markets. They
can’t provide "leverage" that would be comparable to that
of major U.S. banks that have access to an unlimited issuing
resource. The only thing they can do is increase the gap between the
price of "paper" and "physical" gold by
constantly buying the latter on the world markets. Of course, this
increases the instability in the global gold market and creates
potential losses for the main "gold dealers" who work with
the Federal Reserve on leasing programs, but the degree of imbalances
has not reached a critical value yet. It seems to me that the sharp
rise in gold prices will start after the burst of the next "bubble"
in the US stock market.
With
regard to the potential price of gold, as I wrote back in the early
2000's, it is determined by a “fork,” the lower limit of which is
the gold price in 1980, when it had its local peak after the dollar
was decoupled from gold (USA default) in August 1971, and the upper
limit of which is the purchasing power of the dollar in the early
twentieth century, when gold was actual money. Today this “fork”
(in current dollars) is seen somewhere at the level of $ 4,500 - $
15,000 per Troy ounce.
Industry
Questions
American
industry is currently oriented chiefly towards weapons production.
What danger do you see for Russian industrialization to take the same
precipitous path?
It
will be interesting to see if Russia can solve this modern riddle of
the Sphinx: how to fold the economic surplus back into the economy,
while the oligarchs are doing everything in their power to prevent
such a thing. What safeguards Russia may have against the
aggrandizement of power corporate entities, especially militarily
oriented ones, as has been achieved in the USA?
Who
are the groups participating in the discussions to promote the
development of Russia industrially and culturally, is it the RAS,
Valdai Club, think-tanks, etc? What are the main elements being
considered for the proposal? Are foreigners somewhat allowed to
participate at some point in the proposal?
Canada
shares important features of Russia’s new economy such as growing
dependence on resource extraction. Both countries are becoming
petro-states, more or less rapidly. My question concerns the extent
of de-industrialization in Russia. Is it fair to say that industrial
development is now geared to servicing the extraction industries and
to what extent is this a trend or not?
After
the savage destruction of Novorossiya by the ATO an investment in the
hundreds of millions, if not billions, will be required just to get
the region back to where they were before they were attacked. On top
of the money required for infrastructure, when separation occurs,
Novorossiya will be billed, with some justification, their portion of
the national debt. Where will the money come from? What role do you
think Russia should play in the financing of the rebuild?
juliania
New Mexico, USA
12
chair fan
from
Patagonia
Da
Ric Edmonton, Alberta, Canada
rrell
Rankin Canada Winnipeg, Manitoba
Answer
The
situation with industry in the US in the past couple of years has
somewhat improved. There are two reasons: changing energy prices in
the US (and here we must say good words for the Obama
administration), and the rising cost of production in China. However,
the main factor for long-term growth - private demand – is in
decline. This suggests that growth in the US does not even have a
medium-term prospect. The drop in private demand is the main impact
of the economic crisis, which has continued since 2008. Nothing can
be done here, because the main mechanism of its stimulation - the
refinancing of private debt in an environment of a decline in the
cost of credit - is no longer working. Recall that the discount rate
of the US Federal Reserve, which was 19% at the beginning of the
“Reaganomics” policy (the main tool of which was increasing
lending to households), declined almost to zero by December 2008.
It’s impossible to raise the rate now, because it will bring down
the whole pyramid of debt around the world.
Today
US households consume every year about $3 trillion more than they
earn. The situation in the EU is not much better. This means that
aggregate demand in the world will be sharply decreasing. In other
words, continuing to keep the trading and financial infrastructure of
a global system of division of labor won’t be cost-effective. The
world will most likely return to regional systems of division of
labor. Each such system will have to provide domestic production of
basic consumer and investment goods. The territory of their
self-sufficiency will be regional, with high enough inter-zonal trade
barriers. In this scenario the WTO has no prospects.
An
investment source for creating (or restoring) the relevant industry
will be the issue of regional currencies (in our 2004 book these
regional systems of division of labour are called “currency
zones”). In this sense, Canada is very different from Russia.
Russia, most likely, will be one of the leaders of the “Eurasian”
currency zone and will actively participate in the development
strategy of the division of labor and emissions in the zone. Canada
will be a part of the “dollar” zone with its strategy prescribed
by Washington. So if our description of the development strategy in
the short-term is true, then Russia and the US will restore their
industrial production. In the US, due to a significant fall in demand
and the loss of many foreign markets, it will be much easier to do
this. Canada, however, will remain a “resource extraction”
economy.
In general, how the “currency zones” will be configured after a sharp reduction in the global aggregate demand is a very interesting question. In particular, I did not believe the independence referendum in Scotland would result in separation from the UK. However, if the elite of Britain decided to enter the dollar currency zone, then Scotland would almost certainly separate because it is obviously attracted to continental Europe. Canada can see the intrigue with the separation of Quebec revived and its subsequent accession to the renewed EU. But I repeat, all these issues will become relevant only after the sharp fall in aggregate demand.
It seems to me that Novorossiya (and Ukraine, like many other countries in Eastern Europe, after the configuration change of the European Union), will be restored using the ruble as the issuing resource. The ruble may remain the national currency of Russia or become, perhaps under a slightly different name, the Eurasian Economic Union currency, which theoretically can include (out of major countries) Turkey, Japan, and United Korea. The last two countries, which are highly oriented towards external markets, will have no other options for regional economic cooperation after the U.S. returns to a policy of isolationism, without which they will not be able to recover their economies.
In general, how the “currency zones” will be configured after a sharp reduction in the global aggregate demand is a very interesting question. In particular, I did not believe the independence referendum in Scotland would result in separation from the UK. However, if the elite of Britain decided to enter the dollar currency zone, then Scotland would almost certainly separate because it is obviously attracted to continental Europe. Canada can see the intrigue with the separation of Quebec revived and its subsequent accession to the renewed EU. But I repeat, all these issues will become relevant only after the sharp fall in aggregate demand.
It seems to me that Novorossiya (and Ukraine, like many other countries in Eastern Europe, after the configuration change of the European Union), will be restored using the ruble as the issuing resource. The ruble may remain the national currency of Russia or become, perhaps under a slightly different name, the Eurasian Economic Union currency, which theoretically can include (out of major countries) Turkey, Japan, and United Korea. The last two countries, which are highly oriented towards external markets, will have no other options for regional economic cooperation after the U.S. returns to a policy of isolationism, without which they will not be able to recover their economies.
The
Russian expert institutions are divided into three large groups. The
first comprises the fragments of the ex-Soviet system of the Academy
of Sciences. They partly have lost their quality, but until recently
were able to maintain a relative independence. It is this
independence, especially in the economic sphere that has infuriated
the liberal crowd, which tried to completely destroy the Academy of
Sciences as an independent public and expert institute. It is
possible to work effectively with some institutions within the group;
in particular, some of its representatives were among the Russian
participants at the recent XVIII Dartmouth Russian-American
conference in Dayton.
The
second group is created and funded, either directly or indirectly, by
Western grants (the most famous in the economic sphere is the Higher
School of Economics, in Russia known as the “Russian Economic
School”). Organizations within this group represent the interests
of the grantors, and their authority has lately fallen rapidly.
The
third group comprises people who try to address the real problems
with the money that they can find, bypassing the State. I, for
example, am among these people. Among the members of this group are
independent (from the international heavyweights) consulting
companies and research institutes that were created by real
producers, and so on. They have done quite a lot in recent years (in
the early 2000s we, for example, created a theory that describes the
current crisis), but their “weight” within the framework of the
State is quite limited. These institutions or individuals can be very
interesting from the point of view of purely informational and even
non- monetary interaction. Their influence in Russia will grow
strongly.
Ruble,
Currency
Questions
In
contrast to the US Dollar, how is the Russian Ruble supported by the
Russian economy? and its flexibility in working together with the
basket of other currencies forming the next world trade mechanism
outside of the US Dollar.
There
has been some talk about giving the Russian state the right to issue
currency to fund public infrastructure development and to give low
interest loans for business in the productive sectors. What are
the chances of such a thing happening and in a timely manner in the
near future?
Why
don’t Russia revise contracts from countries that sanctioned Russia
– so that all future transactions for Russian Gas & Oil have to
be made in either Gold Bullion and/or Russian Ruble’s?
Christian
Witting Mandal, Norway
Blue
Northern Illinois, US
Catrafuse,
Timisoara Romania
zerone
Germany
André
Montreal Canada
Ricardo
Valdivia Chile
JH
Québec
Julian,
Melbourne
Answer
As
I have written elsewhere, today’s economic leadership of Russia -
the Government and the Central Bank - consider the ruble exclusively
within the framework of the Bretton Woods system; as secondary to the
US dollar. Accordingly, they hold the economy of Russia open to the
world financial system, constrain investment opportunities for the
ruble (by overstating the value of dollar-denominated loans) and rely
on foreign investment.
In
this situation, the stability of the ruble is determined by purely
speculative factors of global markets: a price of crude oil, capital
outflows, foreign investments, and a foreign capitalization of major
Russian exporters. However, the situation can change if we establish
a domestic ruble investment system, create development institutions
that will provide cheap ruble credit to the real sector of the
economy, change the tax system from pure raw materials (with high
value-added tax) to industrial, and begin to stimulate small and
medium businesses engaged in innovation and production.
While
the ruble is seen as secondary to the US dollar, all the
above-mentioned suggestions are highly controversial. As long as a
main objective of any business in Russia is to increase its dollar
capitalization, get a large dollar loan, place shares on the New York
or London stock exchanges or sell something for export, the idea of
selling oil for rubles will not be greeted with enthusiasm. First, it
is necessary to create a ruble-denominated financial infrastructure,
then build a business that is oriented on this infrastructure, and
only then start a strict policy for its separation from the dollar
system. This in any case will require a major change of personnel of
the Russian political elite.
Oil
Questions
Will
the oil-price war currently being waged seriously damage the Russian
economy, or is the Russian economy sufficiently diverse to “weather
the storm”? Do the falling price of oil AND the falling value of
the Ruble effectively offset each other? Is Russia able and/or
willing to take retaliatory measures and what might they be? Is the
Russian oil industry dependent on Western technology for its
operation?
Michael
Schaefer Schwerin, Germany
teranam13
from N. California
Ric
Edmonton, Alberta, Canada
Dick
Lenning Canada
jc
Southern California
Answer
The
oil topic is always very complex. There is a huge number of factors,
comprising the short-term (increasing the oil production from Libya
and partial lifting of sanctions against Iran), medium-term
(development of new, more expensive oilfields, and shale
“revolution”, etc.) and long-term (change in economic structure
and in energy technology). No concurrent view about this problem
exists, so it is needless to talk about long-term trends, which,
undoubtedly are present, but barely known. The short-term trends,
including the recent downturn in prices, will cost the “organizers”
quite a lot if they develop against medium- and long-term trends.
From
the macroeconomic prognosis (it has been revised many times within
the past 10 years, but the core components were set at the beginning
of 2000s, that is why we trust it) the main macroeconomic trend of
the next decade will be the division of the world into currency
zones. Each zone will have its own price formation mechanism (as was
the case in the 70-80s in “Western” and Soviet economic zones).
Therefore the drop in oil prices prepares Russia’s economy for
different day-to-day realities rather than merely damaging it.
I’d
like to point out that Russia invested surplus profit from the sale
of oil into assets in the West. Therefore the decrease in profits
will rather bring problems to the US, in whose treasuries the oil
money was being allocated. Our budget, even accounting for capital
outflow, is in surplus. There are problems with investment resources,
but they could be overcome if the economic policies are changed.
Retaliatory measures are rather political. By the counter sanctions
Russia shows that this is not the way to treat allies. And if they
are not allies, then are they enemies? In other words, does the US
push Russia into an anti-American union with China? Certainly, the
union with China is a disputable matter, but if there is nobody to
talk to in the European Union (where the situation can change, just
look at Marine le Pen in France and Viktor Orbán in Hungary), if the
political elites of the EU are subservient to Washington, and if the
U.S. behaves inappropriately, then what are the options?
Sanctions
have shown that the US these days is impossible to negotiate with. It
means that the matter is not whether Russia can do without American
technologies or not; in fact, it is about how it needs to proceed
without them. If the economy were healthy, then while Russia would
resolve all her current problems, the US would go forward, but amid
sagging demand… The US will likely go backwards; this is a standard
expectation amid long crises. Sure, the problems of Russia won’t be
resolved on their own, it is necessary to update the economic policy.
On the whole, sanctions do not constitute a critical matter for the
time being. They even can be increased, but there is no guarantee
that it will not precipitate a crisis in the US.
Sanctions
David
Northern Californi
Tom
Mysiewicz Reedsport, OR
Rhysaxiel
Bordeaux, France
Paul
from Tokyo
R-27
ER/ET Santiago, Chile
Question
What
effect will sanctions have on the Russian economy over the next few
years? Will they lead to better integration with the BRICS economies
and other non-Western countries and how could this help Russia to
deal with the sanctions regime? Will the sanctions ultimately provide
the catalyst for the development of an alternative reserve currency?
Answer
I’ve
already addressed part of this question so I’ll take the
opportunity to refine what I’ve said before. Regarding the use of a
different currency, this is already decided – There will be one,
probably more than one. There is no other way to support investment,
apart from by issuing regional currency and it should go without
saying that ‘Whoever pays the piper calls the tune’ To put it
another way, If and when regional these regional currency issuing
centres appear it will quickly become clear who are ‘patriots’
and who are ‘collborators’. It’s all quite straightforward: If
you export capital, the destination country will receive the
investment. It will become clear quite quickly
It’s
a completely different matter why the United States chops off the
branch on which it is sitting (ie. stimulating the creation of
alternative reserve currencies). The answer is similarly
straightforward. They simply can’t conceive of their own collapse.
However this belief is not simply a matter of idealistic ‘American
Exceptionalism’ (We are the dominant, thus we shape history, not
the otherway round), but it is also a belief held by the elite, as it
forms a critical tool of social governance. Furthermore, if we admit
that the official economic doctrine simply doesn’t acknowledge the
crisis (To be more exact, it is impossible for the theory to
recognise the crisis as the theory lacks the terms of reference to
describe the cause) then the crisis actually becomes inevitable, if
not inescapable: The economics are themselves founded on axioms which
themselves are impelling the economy to catastrophe. There is nothing
more to say here. ‘Those whom the gods want to destroy, they first
make mad’
The
BRICS, moreover is a pretty artificial phenomemon, dreamt up by
Goldman Sachs, the famous investment bank for purely commercial
reasons. (In fact to issue new securities onto the market). From our
side the BRICS countries look like the leaders of regional economic
zones (Brazil and South Africa in one (‘Southern’). Russia
(‘Eurasian’), China with its own Chinese and India with its own
national zone, given its huge population. It looks likely that the
Indian zone will most closely follow the Eurasian Zone. In these
zones co-oporation will increase as will the attempts of the United
States to solve their internal problems by forcing other countries to
pay their debts, using the institutions and frameworks set up under
the Bretton Woods which established the dollar as the sole reserve
currency. These efforts of the United States are only likely to speed
up the process of regional integration.
Question
In
the absence of exchange controls, has consideration been given to
creating a split domestic-foreign ruble to support the currency and
minimise the impact of sanctions and of commodity and currency
speculators?
Answer
Russia
has a whole collection of legislation to regulate its currently which
are simply not ative at the moment because their activation would
contradict the ideology which drives the financial elites. There is
the mechanism of enforced conversion of foreign revenues (Set at zero
percent at the moment). There are limits on declared FX positions and
other FX regulations which are similarly not active. I am not at all
sure that new legislation is required, those which exist are wholly
sufficient should the will be therr to activate them.
I
have a suspicion that the government and the Central Bank (and this
refers a united ideological, commercial and political ‘team’
which are labelled by the media as ‘Liberals’, although the term
potentially misleading), who promised the national political
leadership economic growth although were unable to maintain it, have
decided to resolve the situation by devaluation. However they simply
don’t understand economics, rather they do not understand that
devaluation will only benefit GDP in teo specific cases: Either there
is a large amunt of idle capacity (like in 1998), or there is a large
amount of freely available credit. At the moment there is neither. FX
investments are not profitable and no one will invest. As for the
ruble the central bank has simply refused to open up the credit
market. This means that there can be no positive consequences from
devaluation only negative ones. The most obvious will be a collapse
in living standards amongst the normal population as the majority of
consumer goods are imported. This brings us to the hypothesis that
the governance of the central bank is in cahoots with Washington with
the shared aim of subverting Putin. The hypothesis is already
mainstream in the Russian Media.
Question
Is
there enough political will and influence inside the Kremlin and the
Russian Government to launch agricultural modernisation and
improvement projects given that sanctions have been imposed on
agricultural imports?
Answer
At
the moment the Kremlin is making demands regarding the state-led
modernisation of agriculture which contradict the Governments
ideology. Naturally this leads to open sabotage. This is absolutely
clear both in the investment environment (The government directly is
responsible for the flow of investment but actually plays the
opposite role at the moment) and in the implementation of the Russian
payments system as just one example of many. If the kremlin has the
political will to change the government then the situation will
improve and with that, agriculture. If not the situation will
continue to deteriorate.
Question
In
your recent appearance on TV with Sergei Glazyev, you suggested that
the use of sanctions by the US was a sign that the current system was
breaking down. Can you elaborate on what you mean?
Answer
I
have shown above that the current political situation in the United
States will lead to the intensification of problems for the United
States itseld, most obviously in the destruction of the dollar as the
global currency. If you see that in order to sustain one of the
‘rules of the game’ that this can only be done at the expense of
other rules then it is abundantly clear that the rules are no longer
relevant and that they need to be changed.
Question
It
appears that the economies of some countries that have followed the
US lead in sanctions are being affected. Do you believe the US has
promised to subsidize the losses of its allies? Why do you believe
these countries have been willing to risk their economies?
Answer
No,
the US will be giving money to no-one. Those countries that have
acted against their own interests have done so as their elites have
been effectively captured by the US. It’s no secret and in fact
many write in the independent European media that it is impossible to
make a career in politics with support from the US. The only ones
therefore who can have a career are those frimly ‘on the hook’.
Often the United States will create that hook themselves (Profitable
contracts, grants, sometimes bribes and even blackmail). It’s not
surprising that they control the entire extent of the EU, eavesdrop
on all telephone call etc etc. It just needs the exposure of an
affair, a few hundred euros of income hidden from the tax authorities
or a recording of an indiscrete telephone call (maybe criticising the
Gay Parade) – they would all be enough to, when exposed to the
national press, to deprive an individual of his social status or a
significant part of his income. Who would go against that?
There
were a lot of scare stories in the 90s about the ‘Stasi’, who
allegedly held records of every citizen of the German Democratic
Republic. We now understand that, in comparison with the practices of
the United States now that this period was actually an unexpected
utopia of personal freedom. To give examples, The Stasi may have
known who slept with whom, but it did not have recordings of
discussions held during these intimate rendezvous. Ask yourself: Is
it pleasant to think that there are people who can, without
oversight, scrutinise recordings directly relating to your personal
life? Furthermore are their many people on this earth who would not
be vulnerable to blackmail in their personal life? And how many
people are there really who would refuse to the the bidding of the
United States knowing that such information is not only in their
hands but ready to be used against them?
Question
What
could be the response of Russia if the situation with the oil prices,
sanctions, economic warfare and military pressure becomes critical?
How will it mobilize its allies and how could it strengthen its
economy and military, especially the air force and missile defense?
Answer
Well
Russian has practically no allies, if we think of them in the sense
like there were in 1939. Belarus, Kazakhstan and maybe a couple of
other small countries. However there a lot of countries that
understand that the United States is single handedly destroying the
world order and with it global security (This is exactly what Putin
said in his ‘Valdai’ speech in Sochi). There are also people in
the United States who understand this. Morover the recent mid-term
election results, a week ago, in the United States clearly showed
that there are people, especially in the older generation, who
without having a depe knowledge of the particulars feel that the
current elites in the US are leading the world to catastrophe. We
would simply hope that the world will not be led to catastrophe.
Trade
Vic,
Northern Ireland
Song,
Canada
Gagarin
Thespaceman Cape Town, South Africa
Question:
Eurasian Union
What
do you foresee in terms of the evolution of the Eurasian Union, both
in terms of internal economic/political dynamics and its relations
with other states (and in particular the US/NATO/EU bloc)? Does it
have the possibility to expand outside of the former Soviet Union?
Are other regional cooperation organizations such as the CIS and CSTO
still relevant?
Answer
As
I have already said, according to our theory the world could split
into several monetary zones – more or less independent systems of
divisions of labor. The Eurasian Union is one such zone. In a
long-term outlook it may include such prominent countries as Turkey,
Japan and United Korea. The last two have no choice: the U.S. and the
EU won’t purchase their produce, and they don’t want to be
friends with China. So, the Eurasian Economic Union has a promising
future, but it also means that we need to work hard to achieve
positive results.
Questions:
European Trade
In
the past much has been made of a “Lisbon to Vladivostok” trade
zone. What do the parameters of such a zone look like, and given the
current hostility of the EU towards Russia, is there any realistic
prospect of making it a reality in the near- to mid-term? What
circumstances could make this more viable in the future?
Answer
I
think there is no such prospect as of today. The situation in Ukraine
has shown that the current EU leadership will not take Russia’s
interests into consideration. Any attempt to discuss these interests
causes a torrent of statements blaming Russia for “imperial
politics”, “restoration of the USSR” and so on. We can argue
about Germany and France being outright blackmailed by the Baltic
states and Poland, the role of Washington etc., but the fact is that
in its current configuration the EU and Russia cannot be “friends”
(in the broad sense of the word). We can resume such discussions if a
reconfiguration of the EU takes place and the Eastern European
countries leave the EU.
Question:
Payments/SWIFT
One
of the purportedly heaviest weapons in the US/EU sanctions arsenal
would be to cut Russia off from the SWIFT payments settlement system.
Much has been made of efforts to create an internal system or to
link with China’s system. What are the challenges facing Russia as
it seeks to end its reliance on this particular Western system, and
what is a realistic timeline for implementation?
Answer
This
could have been implemented promptly, but the Central Bank has
sabotaged all the efforts. As of today, nothing has been done, so we
will have to return to this topic when the Central Bank has new
leadership. The current leadership won’t do anything in this
direction.
Geopolitics
& Foreign Relations
Question:
Russia and relations with BRICs/Emerging Markets
Russia
has been very clear that in light of the West’s aggression that it
would redouble its efforts to form an alternative geopolitical
grouping, both among emerging markets generally and China
specifically. Can you comment on:
Which
countries (particularly among the BRICs) are likely to support Russia
going forward?
China
is probably the most critical relationship for Russia going forward –
however given the often strained relationship between the two, many
are skeptical of the ability to form a true partnership. Why is
today different?
Russia
has been actively seeking to expand its trade links with Emerging
Markets generally and the BRIC nations specifically. Where do you
see the best opportunities for Russia in terms of expanding trade
links with these nations or even creating more formal/multinational
trade structures? Along these lines, do other EM nations share
Russia’s interest in potentially de-dollarizing global trade? Is
there any chance Russia and/or others actually de-dollarize and, if
so, what are the potential benefits and risks to Russia?
Emmanuel
from Ames, Iowa. USA
Anand
from India
NotSoFast
from Luxembourg
Answer
I’ve
already said something about it. All the questions above imply the
preservation of the present Bretton Woods system and describe
possible (or hardly possible, if not impossible) scenarios for
developments in the world. However, according to our concept Russia
and China won’t form a single alliance, they will be leaders of two
different regional alliances – one is the more centralized (China)
while the other more democratic. Today’s convergence between China
and Russia is not due to the fact that they foresee their common
future, but for the reason that they consider existing model
unsustainable. The U.S. tries to describe the Russian and Chinese
policies from the perspective of sustaining of the current order.
This results in a fairly contradictory picture. Once seen from the
right point of view, the picture becomes clear. By the way, according
to this worldview the U.S. becomes a regional leader just like Russia
and China or, let’s say, Brazil.
Question:
Europe
Even
if Russia turns towards Asia and the Emerging Markets, Europe will
remain a critical part of Russian geopolitical strategy. In light of
Europe’s current stance, is there anything Russia can do to improve
relations (short of unacceptable concessions)? How does Russia
manage around the virulently anti-Russian bloc led by Poland, the
Baltics and (Western) Ukraine?
David
Vienna, Austria
Corto
Netherlands, Serb origin
123abc
Germany
Answer
I’ve
already explained that friendship between Russia and today’s
European Union is impossible as long as the U.S. likes it, but this
is just for a while, because as soon as safety considerations become
the forefront concerns, the U.S. will most likely change its
position. What happens to the current elites of the main anti-Russian
countries seems to be interest to no one; they [elites] will have to
go away, because they won’t be able to change their rhetoric, which
will make it impossible for Russia to deal with them. For the time
being Russia has nothing to talk about with the European Union for
various reasons. The first one is rather obvious: trying to find a
consensus whithin the framework of the European Union, the general
position of this organization will always be strongly anti-Russian.
The second one is that Brussels doesn’t have an independant
position; it pursues the Washington’s policy. The third reason is
that the current European Union has no future. We need to discuss
this issue in detail.
If
we place the current European Union on the USSR’s timescale, it can
be compared with the period of 1989-1990. The problems are the same.
Certain
rules were adopted in the context of certain historical, financial
and economic situation, and then later codified. Today
economic and historic conditions have changed, but it’s nearly
impossible to amend legislative policies. Each specific issue might
be settled, although it’s unclear when, but there are tens of
thousands of those issues and the time is extremely limited. The only
chance to accomplish something is to abolish all them at once or, in
other words, to dissolve the European Union. It can be assembled
again, but the re-assembling will be done according to new
regulations.
In
particular, it can be said that Eastern Europe won’t be part of the
“new”
European Union. That’s for sure. It has no industry and thus
presents no value. There was a political need to “tear them off”
from the USSR/Russia and then feed them (to smooth the negative
effect from renouncing socialism). Today’s youth doesn’t remember
socialism, it means that it is okay to just dump those people and let
them survive on their own. They are not of any interest. As
we know from the European history of the nineteenth century, they
will sink into extreme poverty.
But, I repeat, those are their problems.
Coming
back to the original question… It’s foolish to make arrangements
with the European Union in such environment. That’s why it’s
necessary to build our own system of labour division without taking
into account the interests of the European Union. If Russia has
decided to start building import substitutions, it is simply needs to
introduce counter sanctions to a relevant commodity group, since the
EU and the U.S., by pursuing sanctions policy, have burried all the
norms of the World Trade Organization.
Question:
Russia
Given
the lack of popular support domestically for the liberal/Atlantacist
agenda, how do they continue to retain a power bloc within Russian
politics? On the other hand, how do the Eurasian Sovereigntists
envision ensuring economic growth, with so many autarkist/state
capitalist models having shown severe weakness in recent years? What
factor are Great Russian nationalists likely to play going forward,
in particular the more radical/national socialist types?
Kermit
Heartsong San Francisco Bay Area, Author, Ukraine:
ZBig's
Grandchessboard & How The West Was Checkmated
Answer
First
of all, these people (“liberals”) control a considerable part of
Russia’s property; second, they are under the protection of the
USA; and third, from the point of view of the political elite, they
undertook important tasks such as making agreements with the world’s
financial system, investments, and economic growth. Today it has
become clear that there is no economic growth, there will be no
investments, and the USA are not treating us as partners. It means
that the “liberals” have lost the political support and will be
forced out of the political arena. The main question is: how fast
this process is going to be.
As
for the USA, they have already realized that they did something
wrong. The problem is that the Russian “liberal” team has emerged
from the privatization that was a grand theft. Today in Russia the
words “liberal” and a “thief” are synonyms. In this sense,
for instance, a European court ruling on “Yukos” to exact $50 bln
is a grave political mistake on the part of the West because everyone
in Russia knows beyond doubt that “Yukos” was stolen. The people,
who bought it, were fully aware that it was a stolen property and
thus no one owes them anything. In other words, for the vast majority
of the Russian public the court decision is the clear evidence that
the only interest of the West in relation to Russia is to take away
(to loot) the assets that belong to the people (the government). That
is, the western elite, including its legal system, deliberately make
decisions that favor “their own”, even though those people are
professed thieves. This is a hard blow to the trust towards the USA
and EU; the blow is even harder than the sanctions.
As
far as the nationalists are concerned, there is a colossal difference
among them. There are three large nationalist groups in Russia:
Russian nationalists (in a way, they are similar to Ukrainian
Galician nationalists, although, of course, they are more decent so
far as methods and slogans are concerned); the national and religious
nationalists (including Muslim nationalists in the ISIS style), and
imperial nationalists (the ones who want to revive the great state
and who don’t care about national differences among its citizens).
The latter are divided into monarchists, communists and “neoliberal”
capitalists who want to build a “true” capitalism that is
independent of the west.
It
is impossible to understand who will win considering the complex
processes that are going on in the country. Some of them can form
local alliances, but they all have different objectives. That means
that a separate set of relationships need to be build with each of
these groups. At the same time, there is no point in counting on
liberals, in spite of their current power – they have no electoral
potential, they will at most receive 3-5 % of votes. They had
illusions that a new generation would grow up not remembering the
privatization. But the new generation faced the situation when all
the “upward paths of vertical growth” are chock-full of children
of those liberals and of “siloviki” (national security) they have
raised. This is why it is inevitable that new political powers in
Russia will be anti-liberal, or anti-West. “Navalnys” have no
chance – they defend wrong positions. The West, if they want to
have relations with Russia, has to become aware of this situation and
correct it. Right now they don’t want to do that, which means that
there are no positive prospects.
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