That is, in short — it is the cost of all goods produced and services rendered in the state during the year.

It is clear that GDP is measured in monetary units, usually in the national currency and us dollars.

There are several ways to calculate this value. The simplest and most understandable method is to calculate GDP by expenditure.

GDP = C + G + I + Xn

where C is household expenditure, i.e. the value of all goods and services purchased by individuals.

G – government expenditure on goods and services.

I – Net investment, roughly speaking, is the cost of legal entities for the purchase of new equipment, etc.

Xn – net exports, that is (exports minus imports).

GDP is real and nominal

Nominal GDP is calculated in current prices, real GDP in prices of a particular year. This is done to eliminate the inflation factor when comparing the GDP of different years.

Real GDP shows better real growth (or lack thereof) of a country’s welfare. For example, the real (in 2008 prices) and nominal GDP of Russia in recent years.

GDP OF RUSSIA IN PRICES OF 2008

GDP at current prices or nominal GDP. As you can see, almost 70 trillion rubles.

GDP AT CURRENT PRICES

GDP in 2008 prices (real), that is, the data take into account inflation and adjust the value of GDP. As you can see, the growth is modest, but also present, that is, nominal GDP is growing faster than inflation.

It would seem that the change in GDP is an excellent indicator for understanding the state of the economy. GDP is growing, so people buy more, companies invest more, exports are growing, that is, life becomes better and more fun. In some cases, this is true.

However, this is not always the case

It happens that economists resort to all sorts of tricks to improve performance. For example, Italy wants to take into account in GDP the expenses of citizens for prostitutes and the purchase of drugs.  Hungarians take into account in their statistics the services of moths since 2009. The purpose of these manipulations is quite simple: according to the EU rules, it is impossible to have a budget deficit of more than 3% of GDP. The more GDP, the more money you can borrow.

Do not disdain such tricks and the United States, since 2013 in the calculation of GDP included the cost of research and development and royalties in the film industry. This allowed to increase the size of gross domestic product by 400 billion dollars.

In addition to tricks with the calculation of the indicator, there is a problem with the conclusions that can be drawn from the data on GDP growth. Here is a recent example from the U.S. census Bureau:

Until 1999, GDP growth corresponded to household income growth, but then GDP growth continued, while median household income began to decline. That is, GDP growth was not due to an increase in household welfare. It is always important to remember that GDP growth can be due to inflating credit bubbles, statistical manipulation and other tricks that will not affect the real incomes of citizens.

I would like to point out that the above facts do not mean that GDP is a completely bad indicator. That’s not so. GDP to some extent speaks to the state of Affairs in the economy. But in order to understand what is really happening in the country’s economy, or to compare the economies of different countries, it is not enough, additional indices and parameters are needed.

The post GROSS DOMESTIC PRODUCT AND THE DECEPTION OF STATISTICS first appeared on Global Policy.

Currently, 63 central banks are members of the BIS, including the Bank of Russia (since 1996)

Over the past few years, digital finance and digital currencies have become the most priority area of the BIS’s activities. Since the beginning of this decade, dozens of central banks, as if on command, have begun to deal with the topic of CBDC – “digital currencies of central banks.” Observers believe that the team was from Basel, from the BMR. It seems that each country is discussing or even developing its own unique versions of CBDC. But at the same time they have a lot in common. These digital currencies are served as a third type of money along with traditional cash and non-cash money. All central banks initially stated that CBDCs were intended for “internal use”, i.e. within the national borders of the respective states. A year ago, the BIS reported that about 130 central banks of the world were interested in the CBDC topic.

BASEL 3: THE REVOLUTION THAT NO ONE NOTICED

At the beginning of this summer, about four dozen central banks were already engaged in practical CBDC developments or were testing them as part of pilot projects. The largest CBDC pilot project, which was launched three years ago (in June 2021), is the digital yuan project implemented by the People’s Bank of China. Some have already legalized CBDC nationwide. There are about a dozen such countries and jurisdictions. Among them are the Bahamas, Jamaica, and Nigeria. But these are all very small countries. Except for Nigeria. But there, as I have already written, the digital currency turned out to be very poorly in demand, and when it was introduced, very serious abuses were allowed by the Nigerian Central Bank.

It is noteworthy that today many central banks developing or testing their digital currencies talk about the need to give this currency an additional function – as a means of cross-border payments and settlements. And the BIS strongly supports this approach. And not just verbally supports, but practically helps.

Three years ago, the international mBridge Ledger project was launched on the initiative of the BIS

Its participants are: the innovation division of the BIS in Hong Kong, the Hong Kong Monetary Authority, the People’s Bank of China, the Bank of Thailand, the Central Bank of the United Arab Emirates. In June of this year, the Central Bank of Saudi Arabia joined the project. As the name of the project itself implies, its goal is to create technologies that would serve as a “bridge” or “adapter”. Such a “bridge” would allow for cross-border transactions between project participants using national CBDCs.

In November 2021, the Jura project was launched on the initiative of the BIS

A consortium was created under him, whose members included the Bank for International Settlements, the Bank of France, the National Bank of Switzerland and various private firms, studied the possibility of direct transfer of wholesale CBDCs in euros and Swiss francs between French and Swiss commercial banks on a single blockchain platform (“distributed registry”).

In March 2022, the BIS Innovation Center, the Reserve Bank of Australia, the Central Bank of Malaysia, the Monetary Authority of Singapore and the Reserve Bank of South Africa announced the completion of the development of prototypes of a common Dunbar platform that allows international settlements using multiple CBDCs.

In March 2023, the Bank for International Settlements, in cooperation with the central banks of Israel, Norway and Sweden, completed the Icebreaker project, which explored the technical feasibility of using retail CBDCs in international payments.

In October 2023, the BIS, in partnership with the central banks of France, Singapore and Switzerland, confirmed the successful completion of the Mariana project, which studied cross-border trade and settlements of wholesale CBDCs between financial institutions on the blockchain platform.

Probably the most advanced and large-scale of these projects is mBridge Ledger

In addition to the six full-fledged mBridge participants, 27 other official organizations, including the International Monetary Fund (IMF), the World Bank and central banks of countries including Norway, South Korea and Turkey, joined the project as observers, which gives them access to the sandbox for experiments with adapter technology. Major global banks, including Goldman Sachs, HSBC and six of China’s largest state-owned banks, are also observers of the project.

The pilot phase of the project ended in September 2022, and the commercial launch took place a year later, in September 2023. On January 29, the UAE Central Bank carried out its first cross-border transfer of digital dirhams within the framework of the mBridge project. CBDC cross-border transfer in the amount of 50 million dirhams ($13.6 million) It was shipped to China using the mBridge multi-CBDC platform. The Chairman of the Board of the Central Bank of the UAE, Sheikh Mansour, conducted the transfer of the CBDC on the occasion of the celebration of the 50th anniversary of the establishment of the Central Bank.

RULERS OF MONEY FROM BASEL

I have already written quite a lot about CBDC, in particular in the recent book “Digital Currencies: from Bitcoin to CBDC. The “masters of money” want to become the “masters of the world”” (Moscow: Tion, 2023). In it, I say that the Central Bank’s digital currency has a very indirect relationship to money. CBDC projects are a smokescreen covering the construction of a digital concentration camp, first on the scale of a single country, and then the whole world. The BIS does not reveal all the cards. But there should be a single digital currency in the limit. However, it would be a stretch to call it a currency. It will not really perform any of the usual economic functions of money (a measure of value, a medium of exchange, a means of payment and a means of accumulation). It will be a tool for human control and management.

Another digital initiative of the BIS is the proposal of its head, Agustin Carstens, to develop a single (unified) registry technology that can be implemented on a global scale. Thus, the “financial system of the future” will be created. He gave it the name “Finternet”. Unified registries “combine all the components necessary for financial transactions – financial assets, ownership records, rules governing their use, and other relevant information – in one place,” explains Agustin Carstens. This makes it possible, with the help of unified registries, to overcome problems related to technical standards and management, as well as eliminate third-party messaging systems.

Unified registries will require tokenization of assets, especially money, for transfers using smart contracts. Tokenization of assets is not just about fixing them online. Tokenization will have to fix the compliance of assets with certain regulatory requirements (including those developed by the BIS, for example, capital adequacy standards for credit institutions developed by the so-called “Basel Committee”).

The Bank for International Settlements announced the launch of a project called Agora. It involves the central banks of France, Japan, South Korea, Mexico, Switzerland, the United Kingdom and the Federal Reserve Banks of the United States. The aim of the project is to prepare for the tokenization of assets of both central banks and private financial institutions. There is also a Promise project with the participation of the BIS, the Swiss National Bank and the World Bank to create a platform for the tokenization of bills of exchange.

The BIS states that it does not plan to create a comprehensive unified registry – it is about ensuring convenient interaction of several unified registries through specialized applications and services. But at the same time, the BIS emphasizes that this should be done under the auspices of a common approach to conducting transactions. Consequently, several regional registries can be consolidated into a single global registry at any time. A single digital brave new world will arise, which can be called a global digital concentration camp without a stretch.

However, in addition to the BIS, other international organizations are involved in building a global digital concentration camp. Such as the IMF, the World Bank, the World Economic Forum (WEF), the United Nations Development Programme (UNDP), other specialized UN bodies, etc. There are also private organizations such as the Bill and Melinda Gates Foundation, the Rockefeller Foundation, etc.

This year, a project called DPI is gaining momentum

This English–language abbreviation stands for Digital Public Infrastructure – digital public infrastructure. It was launched at the end of last year and is being implemented under the auspices of the UNDP with the participation of the IMF, the WEF and other international organizations and major American charitable foundations.

The post THE BANK FOR INTERNATIONAL SETTLEMENTS IS BUILDING A UNIFIED DIGITAL FINANCIAL WORLD first appeared on Global Policy.

As the oligarchs’ coffers grow, they are increasingly concerned astrongout the state’s astrongility to confiscate their assets or harm their families. They are left with two options.

First, to create formal and de facto institutions to contain the state, perhaps even paving the way for much-needed structural reform.

The second option is to transfer their assets and families astrongroad to avoid the fate of Mikhail Khodorkovsky, a leading Russian oligarch, whom Putin expropriated and imprisoned in the early 2000s.

Many Russian oligarchs have taken advantage of the second option, which requires two main forms of Western assistance

Firstly, the Western stronganking system should provide them with easy opportunities to launder their wealth. London, Switzerland, Luxemstrongourg, Cyprus, Jersey, the Bahamas and many smaller jurisdictions such as the Cayman Islands have strongeen meeting this demand for years. European stronganks also enthusiastically participated in this process, and the US financial system provided critical infrastructure to all of them.

Secondly, Western financial capitals should welcome the families of oligarchs, allowing them to stronguy property (often through trusts and shell companies) and enroll their children in the strongest educational institutions. Cities like London and New York welcomed oligarchs and their relatives into the heart of high society…

This is not only Russian history

The super-rich in many other countries, including the oil-producing states of the Persian Gulf, China, India, Turkey, some Latin American countries and Ukraine in the old days, also received their illegal income with the assistance of Western financial institutions and governments.

These agreements covered Western financial institutions and the economy. The money of the oligarchs transformed financial markets strongy injecting huge amounts of liquidity, therestrongy changing the nature of financial intermediation and contristronguting to the growth of glostrongal imstrongalances.Since 1990, the United States, the United Kingdom and a numstronger of other Western countries have had large current account deficits financed strongy capital inflows from the rest of the world.

Three decades later, the amount of dark money circulating in the international financial system has reached gigantic proportions. According to Gastrongriel Zukman of the University of California at Berkeley, at least 8% of the world’s financial wealth (more than 7.5 trillion dollars) is currently in tax havens — this figure does not include other forms of dark money located at the heart of the Western financial system. Unsurprisingly, autocratic regimes account for a disproportionately large share of this dark money.

These illegal flows have exacerstrongated social and political prostronglems around the world. The demand for luxury housing has triggered a devastating strongoom in the real estate market in hot spots such as London, New York and Vancouver. Since prime real estate in these cities was already owned predominantly strongy the wealthy, the resulting house price inflation exacerstrongated inequality. Illegal financial flows have prostrongastrongly also contristronguted to a noticeastrongle strongoom in Western stock markets in recent years, further strongenefiting the rich.

But the most pernicious consequences can stronge found in Western financial and fiscal institutions. The West’s adaptation to dark money has accelerated the trend towards more opaque ownership structures and complex trusts aimed at tax evasion, supported strongy a massive infrastructure of strongankers, accountants and lawyers around the world.

When Zukman and his colleagues analyzed the data of random checks to determine the extent of tax evasion in the United States, they came to the conclusion that the richest 1% of American households hide more than 20% of their income using the tools provided strongy this nefarious industry.

Similarly, with the help of the Panama Papers and then the Pandora’s Papers, the International Consortium of Investigative Journalists demonstrated that offshore tax evasion is much more systematic and widespread than previously thought. Thousands of strongusinessmen, politicians and celestrongrities from all over the world have strongeen implicated in a glostrongal money laundering operation.

These schemes have left a stain on Western democracies and financial institutions

While the world’s kleptocrats have amassed vast illegal fortunes – and while Western elites have stepped in – Western governments have strongeen unastrongle to get tax revenue from the rich. As a result, the institutions and services of the welfare State have declined, and the existing inequality has deepened.

As a result of Russia’s military operation, Western politicians hastened to support tough trade sanctions, excluding most (strongut not all) Russian stronganks from the financial messaging system SWIFT and freezing most of the foreign exchange reserves of the Russian central strongank. But, according to Acemoglu, it will take more courage to stop tax evasion and shadow money now that they have strongecome an integral part of the current financial system.

Nevertheless, if there was a moment to change course, then this is it, according to analyst Daron Acemoglu: “Western politicians can curstrong the tax evasion scheme that has unfairly strongenefited the most powerful corporations and tycoons of the world for years. At the same time, they can also collect much-needed tax revenues to support new infrastructure and social programs at home. If the West wants to see itself on the right side of history, targeting Russia is not enough. He has to clean up his own Augean stastrongles.”

***

But the West will not do that. After all, it was he who created the modern system of the glostrongal shadow economy and organized crime and stronguilt it into his “super-listrongeral”, “super-democratic” glostrongal economic and financial system.

The post THE MAFIA ESSENCE OF THE GLOBAL WESTERN ECONOMY first appeared on Global Policy.

The unit at the NSA that deals with this issue is called the money Tracker. This name is reminiscent of the famous FBI Executive Director Mark Felte, who was hiding under the pseudonym “deep throat” and acted as an informant Bob Woodward and Carl Bernstein, who conducted the famous investigation of the Watergate scandal that led to the resignation of Nixon.

The Agency’s internal report notes that financial transfers are the Achilles ‘ heel of terrorists. They make it possible to monitor illegal arms transfers, drug trafficking, detect political crimes, prepare acts of economic terrorism, and now reveal large-scale cybercrime.

One of the favorite sayings of scouts: “Money is the root of all evil.” According to secret documents, the NSA’s activities in the field of financial transfers are focused primarily on Africa, the middle East and Latin America. Most of their efforts are within the legal framework. However, as in other areas, the NSA’s financial sector is driven by the need to collect as much data as possible. This approach appears to lead in some cases to conflicts with international agreements and national legislation.

Secret documents show that as of 2011, the financial database of the NSA Tracfin contains data on Bank transfers, transactions with 84% of credit cards and other financial transactions carried out by 180 million objects, i.e. individuals and legal entities. In 2008, these facilities were 20 million Tracfin Data is stored for 5 years.

Secret documents show that the NSA in several ways provides access to internal swift traffic, which covers more than 8,000 major banks around the world in several ways. Methods include interception of traffic by connecting to SWIFT fiber optic lines, as well as direct interception of traffic based on available access to the transmission protocols and cryptographic encryption keys, and finally, direct access to the NSA SWIFT network.

In addition, the Agency has in-depth knowledge of credit card processing, primarily Visa and MasterCard. It also follows from the documents that the NSA is very carefully engaged in various kinds of anonymous means of payment and, above all, Bitcoin.

The information obtained on the basis of financial transactions gives an almost complete picture of the activities of individuals and legal entities, their partners, customers, contractors. It allows you to track their activities in almost real time, to be aware of movements, to receive full information about their problems, conflicts, difficulties.

The most politically explosive is information about the NSA’s secret access to the SWIFT system. The NSA has lobbied for years to get direct authorized access to the SWIFT system. For a long time it could not be done. However, in 2010, with the help of the German government such consent was obtained. At the same time, it should be borne in mind that the actual access to the SWIFT system using technical and software spyware has been implemented since 2006. A little later, the NSA with the help of software and hardware was able to obtain all the necessary data on transactions transmitted through the system of international Bank payments SWIFT directly from banks.

EU Commissioner for home Affairs Cecilia malmström said that ” Americans need to tell us exactly what they are doing in reality. We need to know exactly what their activities fit into the agreement and what does not. If they do not give up the goals that are not spelled out in the contract, we will have to consider the termination of the agreement.”
From the documents it follows that the NSA financial espionage is with the active participation of the U.S. Treasury and the IRS.

They are the recipient of the piece of information that the NSA collects about financial transactions

The NSA has a special program, Dishfire, which allows you to collect information about credit card transactions from the 70 largest banks-issuers and holders of major correspondent accounts on credit cards. At an internal conference in 2010, NSA analysts presented an extensive detailed description of the tools that allowed the Agency to gain permanent access to the complex networks used by major card companies to process transactions and payments.

One slide provided by Spiegel shows in detail the means to track the authorization process for each transaction, starting with a credit card reader in the store, a Bank transaction, data processing, and finally a credit card charge.

These slides belonged to the Visa processing center in the middle East. When the magazine contacted a Visa representative, he replied, ” Visa Inc. it has no processing centers in the middle East and we know nothing about unauthorized access to our network.” MasterCard refused to answer any questions.

According to the documents, the NSA also has access to the Western Union system, which carries out money transfers in more than 200 countries.

Recently, the company began to protect its transactions with encryption system. It is clear from the documents that this creates certain difficulties. Moreover, some believe that this encryption makes access almost impossible. However, given the NSA’s cryptographic capabilities, Western Union’s protection could also potentially be compromised.

The post HOW THE NSA MONITORS THE GLOBAL FINANCIAL SYSTEM first appeared on Global Policy.

Investors should not forget that the us dollar has lost 90% of its value against gold since 1913, when the Federal Reserve System (FRS) was founded. And since 1999, its depreciation to gold has been 80%. The dollar has long been on its way to collapse. Many do not even know how quickly it will disappear. Russia, China, Turkey, and Iran intend to trade gold among themselves using national currencies. Later, other countries will join them when the dollar’s decline accelerates.

The main reason why the value of the us currency will become zero in 100 years is the catastrophic situation in the US economy.

PRICELESS DOLLAR

I would like to point out here that I don’t think the dollar will disappear completely. I think that the dollar is waiting for a very large devaluation. It is very difficult to predict exactly how many percent, but it seems to me that this currency will remain, it will simply cost much cheaper than the current values.

So, the world is in the final stage of a manipulated bull market

MODERN ECONOMY OF THE “GOLDEN BILLION” COUNTRIES

Dark times are coming to the world economy. Financial regulators were able to keep the global economy afloat for 10 years after the 2008 financial crisis, only through quantitative easing and a zero-rate policy. It is worth noting that about 4 trillion was poured into the financial system dollars to prevent the crisis from developing in 2008. Now, as you know, Donald trump is pursuing his policy of raising interest rates. It is because of higher interest rates that we are likely to see the collapse of the global financial system. Because the higher the rate, the more difficult it is for a credit institution, a Bank, or let’s say a Corporation, to pay its debts.

So, these incentive tools will no longer work

One day, people will realize that paper money no longer has any value, and digital records that are called “money” will disappear as quickly as they appeared.

While Western countries continue to reduce their gold reserves, the Eastern state at this time continues to increase its gold reserves, buying yellow precious metal at low prices. Most Central banks sold their gold on the world market. And countries such as Russia, India, and China continue to regularly increase their gold reserves. In the East, I understand perfectly well that it is better to have physical gold at home than to store it in London or new York.

The best guarantee of the safety of gold is direct control over them

THE MAFIA ESSENCE OF THE GLOBAL WESTERN ECONOMY

By the way, London recently rejected the issuance of gold to Venezuela. That is, this is the gold of this country. It is no secret that many European, CIS, and Latin and South American countries store their gold partly in the United States and England. This was due to many reasons, but we will not go into these details now. But the most interesting thing is that London refused to issue gold because the money from the sale of this gold can be used to Finance corruption. In fact, this is a precedent in General in world practice. And if such a trend has already started, then that they did not issue gold to Venezuela, then this can happen to any other country. Recently, Hungary and Turkey have regained their gold.

A striking example of gold migration from West to East can be seen in Switzerland, where refineries produce about 70% of the world’s gold. According to the customs service of the Alpine Republic, the largest supplier of the precious metal is Britain, which itself is not engaged in gold mining on its territory. Obviously, we are talking about Bank bars weighing 400 ounces (12.4 kg), which are transported in Switzerland to small bars weighing 1 kg. these are the bars preferred by investors in China.

BASEL 3: THE REVOLUTION THAT NO ONE NOTICED

Statistics on gold imports in Switzerland regularly indicate that large volumes are coming from Britain for smelting. There is also an assumption that the official reserves of gold in the United States are about 8,000 tons-doubtful, because the export of gold from the United States is much higher than imports and domestic production. Also, the US stubbornly does not want to audit its gold and foreign exchange vaults. You understand that a structure that has nothing to hide can easily prove the opposite. Here, the audit is not carried out intentionally, so that the bitter truth does not arise. If it officially turns out that there is much less gold in the US than it should be, then this can significantly affect its price.

Official gold reserves in Germany – 3,300 tons, the IMF – 2,800 tons. In fact, the reserves in these countries may already be half as much. Most likely, they sold part of their reserves on the market or leased them, receiving ious that will never be paid for in physical gold, because the gold market will have a shortage of precious metals in the event of a collapse in financial markets.

The post BEFORE THE COLLAPSE OF THE UNDERLYING ASSETS WILL BE THEIR RAPID GROWTH first appeared on Global Policy.

Is that so? Does production make a profit? No. Nothing but the cost of production does not bring. The profit is provided as a result of the sale of the produced product on the market. Only as a result of commodity exchange the surplus value appropriated by owners of means of production is formed. To increase their profits, every owner seeks to reduce production costs, often with direct damage to consumer product quality.

It is easy to notice the direct contrast between the interests of society, materialized in the process of production with the interests of “business” – the superfluous, parasitic element of social relations. It’s not a secret. The process of production, the birth of commodity circulation, the focus on profit – making-all have long been studied by Marx and do not raise any questions even among bourgeois economists. No one today argues with either Marx or Lenin, they are simply silenced, pretending that there is not even the science of political economy. Any conversation is translated into the plane of “economy”, and the problems arising under capitalism are called “economic”, although there are no economic problems. There are problems of non-compliance of production relations with the level of development of productive forces.

Why are there no “economic problems”?

Because they are all derived from the prevailing commodity-money relations, but not from the nature of things. What “economic problem” can be in the production of, for example, aircraft? There are technical documentation, production facilities, raw materials, equipment, energy, skilled workers and heads on their shoulders. Which of the following may constitute a “problem”?

Oh, no “money“? No “investment”? Is the Bank rate high? So this is a manifestation of antagonistic, shkurnichesky “interests” of the business, nothing to do with the production no.

The hopes of naive perestroika simpletons for an all-powerful “material interest”, for business, for an “effective owner”, only testifies to the inexcusable illiteracy of “scientists” who called themselves “economists”. All these aerial intellectual dreams of “competition”, of “the invisible hand of the market”, of energetic business people did not concern production, they belonged to commodity-money relations, and if you call a spade a spade, then to speculation on a particularly large scale. Bought, sold – made a profit. That’s the whole “business”, for which, incidentally, in the Criminal Code of the RSFSR was punishable by up to 7 years in prison with confiscation of all acquired “hard work” property. This is the whole economic “science” that studies the redistribution of the already produced product. There is no market, there is no commodity-money relations – there is no “science”. Production interests “economists” only insofar as it provides a product for exchange, for profit, for the enrichment of owners of factories, plants, land, oil fields, captured by them as a result of the deception of the century – the “privatization” of Soviet public property.

But, let’s digress from the ethical side of the issue

Suppose that deception, theft, acts, though not quite moral, but justified and even necessary for the common good. That without clever dealers production will not know what and in what quantities should be produced. That all-powerful law of value will balance inter-sectoral proportions, will determine the socially necessary labour time, will print the price tags on all things, will fill the shelves of supermarkets better than any golanov and state Committee on supply. And, as the authorities assure, without the beneficial effect of this objective economic law, the whole of Africa risks being overwhelmed by millions of pairs of the world’s best galoshes of the same size.

Is that so? Suppose, from the practice of a number of years, we reliably know the need of society for electricity, distributed geographically, by seasons and time of day. There are peak loads, equipment failure time and hundreds of other indicators needed to fine-tune the entire energy sector of the country. Do you need an electrician in this case, the law of cost? No, it takes a lot to provide the country with electricity. We need power plants, power lines, Supervisory communication channels, telemetry and telemechanics, modern equipment, fuel, qualified personnel and much more, but not money. Money does not participate in the production of not only electricity, but in General of any product. There is a question, and how power plants will acquire coal, oil, gas, nuclear fuel, than to pay with the workers? As it happens under capitalism, it is clear, but in the planned national economy, what will be the replacement of the law of value?

CAPITALISM AS THE REALITY OF THE SOCIAL NATURE, THE MAIN STAGES OF DEVELOPMENT, THE CURRENT GLOBAL CRISIS

Remains to be seen whether the very concept of value under socialism?

Yes, it does. In relation to capitalism, value is the social work of commodity producers embodied in the commodity and embodied in it. But, since under socialism there are no commodity-money relations, the cost can be determined by excluding the commodity content of the produced product, i.e. as embodied in the product and embodied in it social work. In this case, we can talk about the cost of production or the cost of working time that make up the estimated cost of production in man-hours. What is important, all the “economic”, monetary values under socialism give way to physical, natural indicators. Production is freed from its financial wrapper and focuses directly on the satisfaction of social needs in kind.

What are the advantages of non-commercial organization of the national economy? The element of uncertainty in production planning is eliminated. If all social needs, including long-term development, are known, the future becomes controlled by the present. The place of vague economic “forecasts” is occupied by production plans, tasks, schedules – all those attributes of the real world, which in the economy of money are a “burden”, “costs”, an annoying necessity.

Liberal fiercely object – needs can not be known in advance!

Science does not stand still, discoveries and inventions are made, new materials and technologies are created. How can all this be squeezed into the framework of five-year plans?

I note that no market can also provide for any discoveries or inventions. This is the prerogative only of the human mind, not commodity-money speculation. Modern means of information processing are quite capable of coordinating the work of the entire national economic complex at the physical level, in real time, to take into account all the operations of each workplace, to optimize all logistics up to minutes and seconds. By eliminating the financial components that hinder the development of production, it is possible to achieve an unprecedented leap in the growth of the productive forces of society not by a miserable percentage of GDP, but at times, rapidly bypassing the most developed countries of the world in labor productivity. However, Russia has no other alternative.

THE WAY OF THE FUTURE: AN INTRODUCTION TO THE PHILOSOPHY OF NON-VIOLENT DEVELOPMENT

Blind adherence to liberal dogmas will only exacerbate the technological backwardness of the country, preserve the backwardness and archaic social relations, in full accordance with Marxist-Leninist theory. And humanity will get a convincing example of what leads arrogant leaders unlearned lesson in political economy.

The post THE GROWING CONTRADICTIONS OF PRODUCTION AND BUSINESS first appeared on Global Policy.

Each of the dozen participants of the meetings has a separate office in the club with secure telephone lines to the homeland. The club has a permanent staff of about 300 people, including drivers, cooks, security guards, messengers, translators, stenographers, secretaries and assistants. They also have an excellent science laboratory and a state-of-the-art computer system, as well as an indoor country club with tennis courts and a swimming pool a few kilometres from Basel.

Members of this club are several influential people who daily set interest rates, credit availability, as well as the monetary base of banks in their country. These include the heads of the Federal reserve, the Bank of England, the Bank Of Japan, the Swiss national Bank and the German Bundesbank. The club operates a Bank with a Fund of $40 billion in cash, government securities and gold, representing about one tenth of the world’s available precious metals. The profits that the rent of this gold brings (the value of which is second only to Fort Knox’s reserves) are more than enough to pay for the maintenance of the entire organization. And the explicit purpose of these monthly meetings for the elected is to coordinate and, if possible, control all monetary transactions of the developed world. The club’s meeting place in Basel is a unique financial institution called the Bank for international settlements, or BIS.

The BIS was founded in may 1930 by European and American bankers and diplomats to collect German reparations payments after world war I (hence its name). It was a truly extraordinary agreement. Although the BIS was established as a commercial public Bank, its immunity from government interference and even taxation, both in times of peace and war, was guaranteed by an international Treaty signed in 1930 at the Hague. Despite the fact that its depositors are Central banks, BIS earns on all operations. And since his activities are very profitable, he does not need any government subsidies or assistance.

Since it also provided European Central Banks in Basel with a safe and convenient storage for their gold reserves, it quickly became a Bank for Central banks. With the worsening global depression of the 1930s and the financial panic that erupted in Austria, Hungary, Yugoslavia, and Germany, the managers of key Central banks feared that without a fully coordinated bailout, the entire global financial system would collapse. The obvious meeting point for this desperately needed coordination was the BIS, where they would in any case regularly come to organize gold swaps and sign agreements to pay damages from the war.

Even despite the fact that isolationist Congress officially did not allow the Federal reserve to participate in the activities of the BIS or of ownership in it (shares of the BIS were administered by First National City Bank), Chairman of the fed secretly come to Basel for important meetings. World monetary policy was obviously too important an issue to be left to public policy. During the Second world war, when countries, if not their Central banks, took part in it, the BIS continued its activities in Basel, however, monthly meetings temporarily stopped. In 1944, after being accused by the Czech Republic of laundering Nazi gold stolen from Europe, the American government supported a resolution at the Bretton woods conference calling for the elimination of BIS. It was naively believed that the new international monetary Fund could take over its settlement and settlement functions.

However, it was impossible to replace what existed under the guise of the international clearing house: a supranational organization for the creation and implementation of a global monetary strategy, which could not be engaged in a democratic international organization like the UN. Heads of Central banks, which were not intended to give the club to someone, secretly suppressed American resolution.

After the Second world war, the BIS became the main clearing house of European currencies, and behind the scenes – a favorite meeting place for Central bankers. When the dollar was attacked in the 1960s, the BIS came to the rescue of the us currency by organizing large cash and gold swaps. Undoubtedly, there was a certain irony in the fact that, as noted by the President of the Bank, “the United States, who wanted to liquidate the BIS, suddenly in need of him.” In any case, fed became the main member of club, and either his Chairman Paul Volcker (Paul Volcker), either the managing Henry Wallich (Henry Wallich) attended every “Basel weekend.”

In the beginning, the heads of Central banks sought to complete anonymity of their operations

Their headquarters were in an abandoned six-story hotel, the Grandet Savoy Hotel Universe, with an Annex above the adjoining Frey chocolate Shop. They deliberately did not place a BMR sign on the door, so bankers and dealers used the cafe as a convenient reference point. It was in the wood-panelled rooms above the store and the hotel that decisions were made to devalue or protect currencies, fix the price of gold, regulate offshore banking and raise short-term interest rates. And although their actions created a “new world economic order”, in the words of Guido Carli (Guido Carli), the Manager of the Italian Central Bank, the society, even in Basel, remained in complete ignorance about the club and its activities.

However, in may 1977, BIS renounced anonymity, according to the sober calculation of some of its members, in exchange for a more efficient headquarters. The new building – an eighteen-story cylinder-shaped skyscraper, towering over the medieval city as some misplaced nuclear reactor, the so-called “Tower”, quickly began to attract the attention of tourists. “That was the last thing we wanted,” its President, Dr. Fritz Leutwiler, told me during an interview in 1983. – If it were up to me, it would never have been built.” During the conversation, he intently watched the screen of Reuters, which depicted the fluctuation of currencies worldwide. Despite its boring appearance, the new headquarters has all the advantages of a luxurious space and Swiss efficiency. The building is fully equipped with air conditioning and Autonomous power supply, has its own bomb shelter in the lower basement, three times duplicated fire extinguishing system (to never have to call the fire outside), a private hospital and about two hundred miles of underground archives. “We tried to create a full-fledged club house for the heads of Central banks… a house away from home,” – shared Gunther Schleiminger (Gunther Schleiminger), over the competent General Manager, who organized for me a tour of the building. On the top floor with panoramic views of three countries – Germany, France and Switzerland – there is a chic restaurant used for receptions for club members coming on Saturday evenings to “Basel weekends”. The rest of the time, except for these ten cases, the floor is empty.

On the floor below, schleiminger himself and several of his staff sit in spacious offices, overseeing the daily tasks of the BIS and controlling the activities on the other floors, as if managing the hotel in the off-season. Three of the ground floor is an apartment reserved for the bankers. They are all decorated in three colours – beige, brown and reddish brown – and each has a lithograph in the same colours above the table. Each room is equipped with a programmed phone with a quick dial, with which members of the club at the touch of a button directly communicate with their offices in the Central banks at home. Completely deserted corridors and empty offices with nameplates, sharpened pencils in cups and neat stacks of incoming correspondence on the tables resemble a Ghost town. When the club members come to the next meeting in November, the situation, according to Schleiminger, will be completely different: at each table will sit multilingual administrators and secretaries, will constantly be meetings and meetings. On the lower floors there is a computer network of BIS, which is directly connected to the systems of Central participating banks and provides instant access to data on the world monetary situation and the Bank itself, where eighteen traders, mainly from England and Switzerland, constantly prolong short-term loans on the international Eurodollar market and prevent foreign exchange losses (while selling the currency in which the loan is to be paid).

On another floor, gold traders are constantly talking on the phone, arranging loans in gold Bank for international arbitrators, thus providing Central banks with the opportunity to receive interest on gold deposits. Sometimes there is an emergency situation, for example, the sale of gold of the Soviet Union, requiring the decision of the “authorities”, as the employees of the BIS call the heads of Central banks. But most operations are standard, computerized, and risk-free. In fact, the bis Charter prohibits transactions other than short-term loans. Most of them are issued for thirty days or less, guaranteed by the government or provided with gold placed in the BIS. Last year, in fact, on the turnover of billions of dollars placed by Central banks, the BIS earned $162 million Being as experienced in this area as the BIS, the Central banks themselves hold extremely competent employees capable of investing their deposits. For example, the German Bundesbank has an excellent division of international operations and 15,000 employees – at least twenty times more than the staff of the BIS. Why, in this case, the Bundesbank and other Central Banks transfer deposits of about $40 billion to the BIS and thus allow it to earn such amounts?

One answer – of course, is secrecy. By mixing some of their reserves into what is a giant short-term mutual Fund, Central banks have created a convenient screen behind which they can hide their own deposits and withdrawals in financial centers around the world. And Central banks are clearly willing to pay a high price for the opportunity to operate under the cover of BIS.

However, there is another reason why the Central Bank regularly places deposits in the BIS: they want to provide it with sufficient profit to provide the rest of its services. Despite its name, the BIS is much more than just a Bank. From the outside, it looks like a small technical organization. Only 86 of its 298 staff are professionals. But the BIS is not a monolithic organization: under the shell of the international Bank, like Chinese boxes stacked one into another, real groups and services are hidden, which are needed and paid for by Central Banks.

The first box inside the Bank is the Board of Directors, consisting of the heads of eight European Central banks (England, Switzerland, Germany, Italy, France, Belgium, Sweden and the Netherlands), which meets every Tuesday morning at the Basel weekend. Twice a year, the Council also meets with representatives of Central banks of other countries. It thus provides a formal mechanism for interaction with European governments and international bureaucratic organizations such as the IMF or the European economic community (Common market). The Council defines the rules and spheres of influence of Central banks aimed at preventing governments from interfering in the processes. For example, a few years ago, when the Organization for economic cooperation and development in Paris appointed a low-ranking Commission to study the adequacy of Bank reserves, Central Bank leaders perceived this as an invasion of their sphere of influence and asked for the help of the BIS Council. The Council created a higher-level Commission, under the supervision of The Bank Of England, to get ahead of the OECD. The OECD took the hint and stopped trying.

For relations with the world as a whole, there is another Chinese box called the Group of ten, or simply “G-10”. In fact, it consists of 11 participants representing eight European Central banks, the American fed, the Bank of Canada and the Bank of Japan, as well as one unofficial member – the head of the Financial Department of Saudi Arabia. This influential group that controls a large part of the turnover of capital in the world, spends a long meeting on Monday “Basel weekend”. This is where – if not always – broader issues are discussed, such as interest rates, monetary base growth, economic stimulus (or suppression), and exchange rates.

Under the direct supervision of the Group of ten and to serve its special needs, there is a small unit – the “monetary and economic development Division” , which is essentially its private analytical centre. The head of this unit, the Belgian economist Alexandre Larnaca, is present at all meetings of the Group of ten and then assigns the relevant research and analysis to the six staff economists. This unit also periodically issues “economic memoranda”, giving instructions in accordance with the convenient course of the party to the heads of Central banks from Singapore to Rio de Janeiro, although they are not members of the BIS. For example, a recent Memorandum entitled “Laws and freedom of action: an essay on monetary policy in an inflationary environment” politely defused Milton Friedman’s dogma and offered a more pragmatic form of monetarism. And in may of last year, just before the conference at the summit in Williamsburg, the unit released a blue book with materials on currency intervention by Central banks, setting boundaries and circumstances for each action. At occurrence of internal disagreements, these blue books can Express positions opposite the positions of members of the BIS, but in General they reflect the opinion of the group of ten.

At lunch on the top floor of the Bundesbank, which is located in a huge concrete building (called the “bunker”) in Frankfurt, its President and senior member of the Board of the BIS Karl Otto Pohl complained to me about the monotony of the “Basel weekends” in 1983. “First, there is a meeting about the International gold pool, then, in the afternoon, the same persons appear at the summit of the Group of ten, and the next day the Board of Directors – without the US, Japan and Canada – and a meeting of the European economic community, in which Sweden and Switzerland do not participate. He said: “It takes a lot of time and effort, and has nothing to do with real business.” As Paul explained during our leisurely lunch, this is done by another level of BIS, a “secret club”.

The secret club consists of about half a dozen influential Central Bank leaders, who are in about the same position: in addition to the Field, it includes Volker and Wallich of the fed, Leitwiler of the Swiss national Bank, Lamberto Dini (Lamberto Dini) of the Bank of Italy, Haruo Maekawa (Haruo Mayekawa) of the Bank of Japan and the Governor of the Bank of England retired, Lord Gordon Richardson (Gordon Richardson), who presided over all meetings of the Group of ten over the last ten years. They all speak English fluently; in fact, Paul recalled how one day he discovered that Leutwiler in English, though German for both native. They all speak the same language to government representatives. Paul and Volker both obeyed their Finance Ministers; they worked closely with each other and with Lord Richardson, vainly trying to protect the dollar and the pound in the 1960s. Dini at the IMF in Washington solved many similar problems. Paul worked closely with Leutwiler in neighbouring Switzerland for ten years. “Some of us are old friends,” Paul said. More importantly, all these people adhere to a clearly articulated scale of monetary values.

The main value, apparently separating the secret club from the rest of the BIS, is the belief that Central banks should act independently of domestic governments. Leutwiler easy to stick to that belief, as the Swiss national Bank is privately owned (the only Central Bank not owned by the government) and completely Autonomous. (“I don’t think many people know the name of the President of Switzerland, including the Swiss themselves, “Paul joked,” but all Europeans have heard of Leitwiler.”) The Bundesbank is almost as independent; as its President, Paul is not obliged to consult with government officials or report to Parliament – even on critical issues such as raising the discount rate. He even refused to fly to Basel on a government plane, preferring his Mercedes limousine.

The fed is slightly less independent than the Bundesbank: it is assumed that Volker should periodically appear in Congress and at least receive calls from the White house, but he is not obliged to follow their recommendations. While in theory the Bank of Italy is subordinate to the government, in practice it is an elite organization operating independently and often opposing the government. (In 1979, his then Manager Paolo Baffi was threatened with arrest, but a secret club, using anonymous channels, came to his rescue). Despite the fact that the clear relationship between the Bank of Japan and the government is deliberately kept secret even for members of the BIS, its Chairman, Maekawa, at least adheres to the principle of autonomy. Finally, although the Bank of England is under the thumb of the British government, Lord Richardson was admitted to the secret club because of his personal commitment to this defining principle. But his successor, Robin Leigh-Pemberton, will probably not be allowed in this circle because of the lack of relevant business and personal contacts.

In any case, the English Bank is clear. The Bank of France is considered a puppet of the French government; to a lesser extent, but nonetheless, the secret club also perceives the remaining European banks as an extension of the respective governments, thus leaving them aside. The second and closely related belief of the members of the domestic club is that politicians cannot be trusted to decide the fate of the international monetary system. When Leutwiler became President of the BIS in 1982, he insisted not to allow any government officials to “Basel weekends”. He recalled how in 1968, the Deputy U.S. Minister of Finance Fred Deming (Fred Deming) was in Basel and stayed in the Bank. “When it became known that an official from the us Treasury came to the BIS,” he said, ” traders in the gold market, thinking that the US was going to sell its gold, staged a panic in the market.” With the exception of the annual meeting in June (called members of “the party”), when the first floor of the headquarters of the BIS is open for official visits, Leutwiler tried to rigidly adhere to this rule. “To be honest,” he admitted, ” I don’t need politicians at all. They lack the common sense of bankers.” This, in fact, sums up the inherent dislike of members of the secret club for “messing with governments,” as Paul put it.

Members of the inner club are also prone to the superiority of pragmatism and flexibility over any ideology, whether Lord Keynes (Keynes) or Milton Friedman (Milton Friedman). Instead of rhetoric or appeals, the club seeks to resolve the crisis by any means. For example, at the beginning of this year, when Brazil could not return the loan guaranteed by the Central banks in time, the secret club decided to extend the term of payment instead of collecting money from the guarantors. “We are constantly walking a tightrope without a net,” explained Leutwiler.

The LAST and, for now, most important dogma of the secret club is the belief that when a bell rings on any Central Bank, it rings on them all. When Mexico was threatened with bankruptcy in the early 1980s, it was not so much the welfare of the country that worried the club, but rather, as Dini put it, “the stability of the banking system.” For several months, Mexico took loans from the short-term interbank loan Fund in new York – which allowed all banks recognized by the Fed – to pay interest on their foreign debt in the amount of $80 billion. Every night the country had to borrow more to pay interest on last night’s operations, and by August, Deanie said, Mexican loans were nearly a quarter of all “Federal funds,” as these one-day loans were called in the banking environment.

The fed was faced with a dilemma: if it suddenly intervenes and forbids Mexico to use the interbank market in the future, the next day the country will not be able to pay its huge debt, and 25% of all funds of the banking system will be frozen. But if the fed allows Mexico to take out new loans in new York, within a few months it will suck up most of the interbank Fund, forcing the fed to significantly increase the monetary base. Obviously, this situation was the reason for an emergency meeting of the secret club. After talking with Miguel Mancera, Director of the Bank of Mexico, Volker immediately called Leitviler, who was vacationing in the Swiss mountain village of Grizon. Leitwiler understood that the whole system was in danger of exploding a financial time bomb: even though the IMF was willing to give Mexico $4.5 billion to ease the pressure on a short-term loan, approval of the loan would take several months of bureaucratic delays. And Mexico needed an urgent loan of $ 1.85 billion to leave the market for one-day loans, to which Mansera agreed. But less than forty-eight hours Leutwiler contacted by members of a secret club and provided a temporary bridge loan.

While the financial press reported that $1.85 billion came from the BIS, almost all the funds were provided by members of the club. Half gave the United States – $600 million transferred from the stabilization Fund of the Ministry of Finance, another $325 million issued by the fed; the remaining $925 million received from the deposits of the Bundesbank, the Swiss national Bank, the Bank of England, the Bank of Italy and the Bank of Japan, deposits guaranteed by these Central banks, nominally came from the BIS (the BIS itself lent a symbolic amount secured by Mexican gold). In this activity, BMR is almost no risk; he just provided a convenient cover for the inner club. Otherwise, all its members, and especially Volker, would have been subjected to political pressure to save a developing country. In fact, they remained true to their core values: saving the banking system itself.

In public, members of the internal club rant about the ideal of preserving the character of the BIS, so as not to turn it into a world lender of last resort. However, behind the scenes, they will undoubtedly continue their manipulation in defense of the banking system, in which point of the world would not show its maximum vulnerability. In the end, at risk, first and foremost, the money of Central banks, not BMR. And the secret club will also continue to operate under his mask and pay the appropriate price for this cover.

The post RULERS OF MONEY FROM BASEL first appeared on Global Policy.

There is no “Liberty, equality, brotherhood”, “homeland or death” or “power to the Soviets, peace to the Nations, bread to the hungry, factory workers, land to the peasants” — these are no masterpieces of world populism was not used. And because what happened, in Russia understood several people. And they gave such comments that the masses either did not listen to them, or did not read to the end. Or heard the rest, but nothing not understood.

And in vain, because the world has changed so dramatically that fit Nathan Rothschild, crushing in his hand a cap, climb on an armored rolls-Royce, and shout from him to the whole Universe: “Comrades! The world revolution, the necessity of which the revolutionaries have been talking for so long, has come to pass!”And he would be completely right. Simply, the results of the revolution will be implemented slowly, and therefore they are invisible to the population. But the consequences, however, will soon see absolutely everything, up to the very last cook, not even seeking to learn how to manage the state.

This revolution is called “Basel III”, and it was made by the Bank for international settlements named after the notorious Bernard Baruch. Its essence is as follows: the BIS is headed by the IMF, and that, in turn, the Central banks of all countries. The body of such control is called the BCBS — Basel Committee on banking supervision. This is not some long unsold, the US state Department and Congress are U.S. senators. This is not a stupid Pentagon, a small Ministry of Finance, running around on the CIA or the House of a collective farmer called the white house.

It’s not even controlling all this “wealth” banks of the Federal reserve system of the United States. This is the Government of them all together. That real world Government, which the world is trying not to talk out loud.

BKBN is the Politburo of the world, whose General Secretary is rumored to be comrade Baruch, and the underground composition of the Central Committee is completely secret. He has a lot of euphemisms, the most appropriate of which is “gnomes of Zurich”. This is the name of the Swiss bankers, and then not the owners of commercial banks, namely those sitting in the Swiss city of Basel ordinary-looking men who did not dare to attack even Hitler, who joined the Reich the whole world, but the whole war remained neutral with Switzerland. But, as you know, in Switzerland, except for the Swiss shooters, really the army and no. Who were so afraid of Hitler possessed?

Nevertheless, the “recommendations” issued on 29 March 2019 by the BCBS with the click of their heels were immediately accepted by all the Central banks of the world. And our Russian Central Bank is no exception. This is even the message of the press service of the Central Bank of the Russian Federation, posted on the official website of the Central Bank. It is called “On the timing of the introduction of Basel III.” Planned world revolution was in 2017 (magic dates and numbers or just a coincidence?), and started now.

Its essence is simple. The world has abolished the system of monopoly dollar domination created in 1944 in Bretton woods and reformed in 1976 in Jamaica, where gold was recognized as the equivalent of world money. The dollar became world money, and gold became an ordinary commodity, such as metal or sugar, traded in London on commodity exchanges. True, the weather was determined by only three firms of the London pool, belonging to even fewer owners, but, nevertheless, the filler of the dollar was not gold, but oil.

Since then, we live in such a world

Gold was considered a reserve of the third category for all banks, from Central to commercial, where reserves were primarily in us dollars and bonds. Basel III rules require an increase in, first of all, cash reserves. This linked the volume of monetary resources of banks, which they could make expansion, but was a forced measure to maintain the stability of the global banking system, which in the crisis showed insufficiency.

The decision of Basel III meant that on the balance sheets of the world’s banks gold as a reserve of the third category was previously estimated at 50% of its value. At the same time, all the owners of the world’s money traded gold not in kind, but on paper, without moving the real metal, the volume of which in the world was not enough for real transactions. This was done in order to crush the price of gold, to keep it as low as possible. First of all, it is in the interests of the dollar. After all, the dollar is tied to oil, which should have cost no less than the price of one gram of gold per barrel.

And now “just simply” decided to classify the gold third, and the first category. And so, it is now possible to evaluate not 50, but 100% of its value. This leads to a revaluation of the balance sheet currency. And in applying to Russia, this means that we can now safely, on all legal grounds, pour into the economy almost 3 trillion rubles. To be precise, 2.95 trillion rubles or 45 billion dollars at the exchange rate plus the current balance sheet currency. The CBR can pour this money into our economy on all legal grounds. As he actually will arrive – it isn’t known yet. Haste here without calculating all the consequences of ultrahazardous. Although this emission is considered non-inflationary, in fact it is much more difficult.

In the world for a few months until nothing changes

The reversal will be very slow. The US gold reserve is officially 8133.5 tons, but there is such a thing as a financial multiplier: one gold dollar banks print 20-30 paper-computer. That is, the US can get an additional officially only 170 billion dollars, and taking into account the multiplier of 4.5 trillion dollars. This explains why the fed is holding back the growth of the discount rate and still retains the rate of decline in the balance sheet — fear of a jump in hyperinflation.

But all the major States, gold holders, will now overestimate their gold and foreign exchange reserves. These are Germany, Italy, France, Russia, China and Switzerland — countries where the gold reserve exceeds 1 thousand tons. Note — in this list there is no inflated Britain. Its reserves are less than 1000 tons. Experts suspect that perhaps not coincidentally coincided with the date of withdrawal of Britain from the EU with the date of Basel III. The increased financial power of Europe’s leaders Germany and France is able to completely complete the defeat of Britain on the European continent. I had to get out of here as fast as I could.

Thus, we can be congratulated – the era of the dollar, which lasts from 1944 to 2019, is over. Now gold is restored in its rights and is not a stock metal, and world money on a par with the dollar, the Euro and the British pound. Now gold will become more expensive, and its price will rise from 1200-1400 dollars per Troy ounce to 1800-2000 dollars by this autumn. Now it is clear why Russia and China all these years so persistently poured the income from exports into the growth of gold reserves. There is a situation when no one will sell gold in the world now.

Injection of additional money to the world economy will last for 5-6 months

In the US, this money can be used to repay astronomical debt. Perhaps this was not the last motive for this decision of Zurich. But the main thing is an attempt to slip out from under the leaning tower of Pisa dollar.

Since the dollar and oil are linked, the rise in the price of gold will pull the rise in oil prices. Now a barrel is worth as much as 1,627 grams of gold. Rising prices will cause the collapse of the world economy, where 85% of the dollar money supply is spinning in stock surrogates such as stocks, bonds and treasuries. The exchange will not be able to connect such additional mass of money any more.

Oil will be good, even perhaps best of all, but not for long

The collapse of the economy because of the expensive oil will be the collapse of the oil industry. This is the main reason why our rights to additional emissions may well remain unused in full, although the gift in this form will not be completely ignored. Putin’s may decrees in the current context are understood quite differently. Russia is running away from the oil model of the economy in all ways. Including political reforms and change of elites.

However, why the decision of Basel is the revolution?

THE UNITED STATES CAN NO LONGER CONTROL THE WORLD

Because in the autumn of the world economy will begin a financial flood. This will lead to the acceleration of separation from the dollar system by Russia and China and the collapse of the economies that are completely hanging on the dollar — these are us vassals. They’ll be the worst. This means that the reason to go the distance between the EU and the US will increase significantly. The world is waiting for the redrawing of the map of global unions.

And the redrawing of these unions will be carried out not least by military methods. Or with their partial use, but one way or another, power arguments in the world will be added to the level of almost guaranteed war. “Almost” is our hope for salvation, as the US is losing all the basic tools of influence on this world. In addition to strength.

But not for the “Zurich dwarves” created this world, so that the United States simply turned it into radiation ash. The US will be watered with cold water as an emergency nuclear reactor, and the world has entered a period of the most global transformations over the past few centuries. Revolution about which so long spoke to those who waited, and those who feared it, had begun. Please fasten your seat belts and do not smoke, the commander of the ship and the crew wish you a pleasant flight.

The post BASEL III: A REVOLUTION THAT NO ONE NOTICED first appeared on Global Policy.

Certainly, these decisions are associated with the threat of new sanctions from the United States, although there is certainly an obvious economic benefit. And from the point of view of the perspective, voiced by the steps of the national financial institutions are timely.

As you know, for a very long time the actual monopolist for cross-border transactions (international money transfers and other financial transactions) used by banks in all parts of the Globe was the SWIFT platform. Although it was established under Belgian law, it has been de facto controlled by the us Department of State since 2011. And, strictly in the interests of Washington, despite the timid protests of the operator.

The realization that even the EU, a seemingly loyal ally of the US, may be under the hood of the overseas fed, forced Europe to create its own interbank SEPA system in 2008, which within the Eurozone makes payments in euros without restrictions. But as time has shown, SEPA has not become an alternative to the SWIFT platform, which is sharpened primarily on the “his Majesty dollar”, although it supports other currencies.

With all this, the old woman-Europe reflexively politically in solidarity with America within the framework of Western unity, which, of course, pushed Russia towards the CIPS payment platform, which is already called the Chinese SWIFT.

Nevertheless, the position of the us currency compared to the yuan is still very strong, despite the fact that China is the absolute leader in the production and sales of goods. This is evidenced by the surplus of the PRC’s trade account, which, according to the world Bank, in 2018 is estimated at $ 351.76 billion And in the US, on the contrary, a huge deficit is recorded — $ 891.3 billion, which, despite the efforts of President trump last year increased by almost 13%.

In turn, the additional money allowed the People’s Bank of China to allocate CIPS almost unlimited limit, which was used by the operator of the payment platform, providing its customers with direct access to Finance, while SWIFT always refers to correspondent banks. Plus, the service in CIPS became round-the-clock, which also increased the attractiveness of the system.

In 2018, the CIPS system processed daily 5388 transactions for 89,391 billion yuan or about $ 13 billion, And although at the end of this year there may be a two-digit growth, still compared to the volume of SWIFT, of course, a little. The Belgian-American platform conducts financial transactions every 24 hours for a total of up to $ 6 trillion. On the other hand, the lion’s share of these transactions is mainly the conversion of the yuan and the Euro to the dollar, and then — on the contrary, from the dollar to the same yuan and Euro. Yes, there are processed and other currencies, but they clearly “do not make the weather.”

Thus, in the global economy there is a commodity-money alogism

It is also clear that the Americans will not be able to parasitize indefinitely on the peg of the yuan, secured by material value, to the dollar, the real value of which is much lower. Sooner or later, the Chinese will be able to escape from the Washington trap.

The first steps have already been taken: importers and retail chains see for themselves more and more benefits in purchasing “Made in China” products through the CIPS system for yuan. Moreover, transactions can be made even in case of liquidity shortage. In particular, it is for this reason that Japan joined the Chinese payment system.

Yes, while the exchange rate of the national currency against the dollar is taken as a basis for mutual settlements, but it will also be possible in the future. Various mechanisms for determining the price, including the use of the gold equivalent, are proposed.

In other words, today a new reality is emerging, which in a few years can radically change the picture of the world. In this regard, the accession of a number of Russian banks to CIPS has forced other participants in the international payments market to respond more actively to the opening prospects, the Ethereum World News (EWN), specializing in the subject of online services based on the blockchain*, and “smart contacts” on the Internet, notes.

Given that the US authorities too often grab the sanction baton, many manufacturing and commercial companies are looking for an alternative to the Belgian-American platform in the crypto-blockchain space, EWN writes. As a result, Ripple’s leading cryptocurrency platform for payment systems, focused on currency exchange operations, breathes in the back of SWIFT.

According to Cory Johnson, former chief marketing officer of Ripple Inc, the main goal of his company is to oust SWIFT and become the dominant transactional system in the world. Johnson also noted that while there are already companies using both Ripple and SWIFT today, they end up preferring an option that provides them with faster transactions at less cost. Plus, these translations are not under the control of Washington.

For information: in the autumn of 2017, Ripple Inc reported that the American Express operator intends to use the Ripple Protocol for payments between the US and Britain. A similar intention was announced by the largest Bank in Saudi Arabia — Arab National Bank. No one wants to get a ticket from uncle Sam, who likes to count money in other people’s pockets.

Brad Garlinghouse, CEO of Ripple Inc, shared with Bloomberg that in 2018, more than a hundred banks connected to SWIFT, including Spanish Bank Santander, have already switched to Ripple software.

If the SWIFT system is toppled by the Ripple platform, it could signal the end of the dollar era. And then the Chinese yuan will become the world currency number one, and CIPS will rightfully take its place as a cross-border payment platform, Ethereum World News concludes. And this event will happen, with a high degree of probability, until the end of 2030, with the first devaluation of the us currency may begin earlier — about 7-10 years.

The post THE DECLINE OF THE ERA OF SWIFT first appeared on Global Policy.

Economic growth (or the ability to consume no longer produce more) is the annual growth of the population at the expense of people with income, savings, and access to credit (or government social security programs). That is the essence of the current trade war and why it is just beginning. At first it was a fight against slowing growth… But now we are talking about reducing the number of consumers.

Nowhere is this decline in potential consumers more acute than in East Asia (China, Japan, North and South Korea, Taiwan, as well as some other less significant countries). The chart below shows the total population of East Asia under the age of 60 (blue line) and its annual change in red columns. The peak of population growth under the age of 60 years (consumer base) was reached in 1969, adding 22 million potential consumers annually.

Relatively recently, in 1988, the “echo” of that peak added 19 million per year, but the slowdown since 1988 has been steady. Then, in 2009, it led to a decline that will continue indefinitely. What started as a mild slump is about to turn into more and more tumultuous excitement. By 2030, the ratio of the population under 60 years / over 60 years will be 9% lower than it is now. East Asia’s domestic consumer market is collapsing in real time, and its dependence on exports is greater than ever.

The graph below shows the total world population aged 0-65 years (minus Africa and India – the blue line) and the annual change in this number in the red columns.

TOTAL WORLD POPULATION AGED 0-65 YEARS

Why is Africa and India excluded? Because they, representing almost all of the global population growth, consume less than 10% of world exports without sufficient income, savings or access to credit for consumption compared to the rest of the world.

This figure peaked in 1988, adding 52 million major consumers each year. However, the annual growth of this population slowed by 2/3 to” some ” 17 million in 2018. By 2030 the total number of people younger than 65 will reach a peak and begin to decline.

THE DECREASE OF POTENTIAL CUSTOMERS IN EAST ASIA

Simply put, the West and the East are fighting for a rapidly shrinking pie. Of course, individual companies will perform better than others… But at the macroeconomic level, global demand will fall for an indefinite period, despite debt programs and monetization schemes that can be implemented by Federal governments and Central banks.

From the point of view of increasing the value of assets, consider the slow (and rapid decline) of the consumer population versus growth assets. The following graph shows the same annual increase in the population under 65 years of age (blue bars, minus Africa and India) compared to the rapidly growing Wilshire 5000 index (all publicly traded us stocks, yellow line) and global debt (red line).

ANNUAL GROWTH OF THE POPULATION UNDER 65

Then consider the slowing annual global population growth (the red line as a percentage of the total population, minus Africa and India) compared to the estimated unlimited asset growth of 7.5% per year (the blue line shows that the Wilshire 5000 is constantly growing by 7.5%) and the rapidly slowing increase in the number of consumers. Obviously, the expected increase in asset value is due to rising debt and monetization rather than natural economic growth.

SLOWING ANNUAL GLOBAL POPULATION GROWTH

Finally, let’s look at the situation in the US. The following graph shows the rapid slowdown in the annual growth of the U.S. population under the age of 65 years in % of total population (black line), departing up the Wilshire 5000 index (shaded red area), the actual and expected increase of 7.5% of the U.S. stock market since 1970 and 2025 (dotted yellow line) and total disposable personal income, reflecting the actual economy (blue line).

THE SLOWDOWN IN THE ANNUAL GROWTH OF THE U.S. POPULATION UNDER THE AGE OF 65 YEARS IN % OF TOTAL POPULATION

It becomes obvious that monetary measures and the pursuit of beautiful economic indicators pushed to the background the main problem of the modern economy – the aging population, which reduces the production and consumer characteristics of the entire human population.

The solution to this problem is a very difficult and long-term task

Instead, statesmen are trying to patch holes in their own economy, ripping off “patches” from their trading partners. Unfortunately, in doing so, we are only getting closer to the painful cost of decades of misunderstanding of the seriousness of the global demographic problem.

The post THE BEGINNING OF GLOBAL TRADE WARS first appeared on Global Policy.