RI... What is the foreign policy game plan ranged against Russia? It looks like the first serious baby-steps to an existential sanctioned escalation may have just been quietly taken. It may very well be that the first Russian bank was disconnected from SWIFT. While I have not heard any confirmation, the word on the Moscow financial grapevine persists.
The Russian "Tempbank" (www.tempbank.ru/eng/) whose management has been individually sanctioned by the US for ongoing trade with Syria and Iran was disconnected from SWIFT according to apparently “informed sources". It seems after the sanctions were removed from Iran a while ago Tempbank went ahead and legally opened correspondent accounts with the Iranian Central Bank and a number of large banks of that country. It has further been rumored that the Tempbank chairperson, Mr. Mikhail Gagloyev received a letter from the "human rights" organization "Associations against the Nuclear Program of Iran" (UANI). This is an interesting organization in its own right. In the letter, UANI warned the Russian bank against cooperating with Iranian or Syrian companies. Meanwhile, the talk in the financial street was that the management of Tempbank was targeted for personal sanctions because of their cooperation with Iranian and Syrian businesses. If these reports are correct, then it follows that with the right amount of influence from the right sources, any Russian bank can be disconnected from SWIFT without much legal recourse or chitchat. This does not look to be a de-escalation of tensions. Then what other domino’s might follow, and to whose real advantage?
While on the subject of money and banks. Governments are struggling to discover just the right fix to get a balance between controlling public debt, which now exceeds 110 per cent of GDP for the advanced economies, and boosting the rate of economic growth. The first goal requires quite a bit of budgetary tightening, while the second needs just the opposite. What is a government or central bank to do?
One option I overheard recently being discussed by some (very respectable) EU bankers recently imbibing vodka in Moscow is to restructure (i.e.; write off, disappear) part of the government debt that has been bought up by the central banks as a direct result of quantitative easing. Their logic was since both the government and the central bank are the public sector; a consolidated public sector balance sheet would net this debt out entirely. I paused and tried to puzzle this one out over my cappuccino as I stirred in my sweetener, but no bright lights illuminated my thinking. All I could come up with was a deep breath and a vision of hyperinflation spreading like diaper rash across the world’s financial backside.
advertisement Now consider what might happen if those bonds held by central banks were simply cancelled, instead of being sold at some point in the future back into the private sector as was initially dreamed up (before NIRP’s and ZIRP’s became household monikers). Should that happen the long-term restraining effect of bond sales would also be cancelled out, so theoretically there should be an immediate stimulatory effect on nominal demand in the economy. Theoretically. In fact, the central banks in both the USA, Japan and EU have purchased so much government and commercial debt since 2008 that the effects of such an action could be rather volatile putting it mildly. It follows also that the volatility of the financial markets would be even greater if instead of just cancelling past debt, the central bank were to agree with the government to further enhance financing increases in the budget deficit by printing even more money. We would then really be in a world of hurt, as the specter of “helicopter money” becomes reality. Say goodbye to pretending there is a firewall between monetary and fiscal policy. I wonder if this way of thinking has taken root at the Fed as well, time will tell no doubt.
Except in times of war, countries have not seriously considered unleashing such extreme actions. The hyperinflationary damage, which results from the elimination of central bank capital, has normally been considered too dangerous to let out of the financial cage.
I looked over at the two bankers who ordered yet another round with gimlet eyes and hugely self-satisfied smiles and thought to myself, hell, with leaders like these anything is possible especially if they have positioned their personal portfolios on the “right” side of punting the market. Better still, if they have not done so already, they should really get a reality check from Russia’s central banker Ms. Nabiullina, it would save us all from a world of monetary pain.
Poster Comment:
Peter Hallam louis robert • EDIT: Just checked the banks website and message on front page says:
"Comment by the official representative of the Ministry of Foreign Affairs of Russia, Alexander Lukashevich, regarding extending the unilateral US sanctions against Syria affected Russian “Tempbank”"
It's official. Yep. The U.$. war of aggression has started.
@ Louis: Correct. It is a calculated act of aggression designed to harm a nation which has done nothing to the aggressor but instead has been targeted because the aggressor has been unable to subvert the nation by other means. This is the natural escalation of aggression and is specifically designed to harm the recipient nation through what the aggressor nation has identified as 'core essential industry' of the aggressed. This is a war crime. It targets industries and persons in the civilian sphere. There is no evidence that the target of the sanctions (removal from SWIFT is a form of sanction) has engaged in activities that could be considered aggression to the aggressor.
Just FYI: Currently in Australia the CEO of one of our biggest banks, we have four major banks, had to resign after it was disclosed that the bank willfully engaged in financing and allowing passage of monies to known terrorist organisations. Yep. One of Australia's biggest banks is / was being investigated for funding terrorism. There was mention in the media that the fines would 'liquidate the entire bank because the cost could be in excess of a Trillion Australian dollars. Yes. A trillion!! (Try and get your head around that number in reference to AU markets). But nothing has happened... except a sacrificial lamb was publicly led to slaughter ie: NO SANCTIONS against the bank or removal from SWIFT. Apparently its business as normal. Why has nothing happened to this bank? WHY NOT?????
When we / the people, finally notice things like this, it is actually toward the last stages of preparing for war. It takes time and a lot of things need to be done behind the scenes in order to get to this stage of targeting civilian structures. It's not just a matter of issuing a letter and pressing a button. They (the DeepState) will have been preparing for this step for a while. Probably there was a big financial deal or cooperation agreement about to go through / signed and the DeepState could find no other way to stop it... other than PHYSICALLY STOPPING IT. I'd love to get the background on what Tempbank was negotiating and what business interests they are pursuing.
These are the first shots in WW3. Next people will not be allowed to request Ruble's or you will be labelled a "Russia Sympathiser" and put on a surveillance list so that you can be tracked all over the planet in order to 'counter prospective subversive activities' as dictated by U.$. Alphabet agencies.
Think it can't happen. It probably already has. Watch this space...
Kjell Hasthi Peter Hallam • Having your assets in real estate [as investment] is also a 50% risk (that was the fall in early 90-ties. No buyers -> real estate will crash) Stock will be more than 50% [selling stocks means moving into cash. There are not much alternatives] Bottomline: Local money is fine. When everything falls you can buy the same for your money. Money will be what all need. They may quite well restrict how much money you can take out of ATM.
John Brown • First of all the central banks of almost all countries are almost all privately owned so this guy has very little understanding of how the financial system works.
If Russian banks are kicked out of SWIFT, this is great news and a gift to Russia. Now Russia can use its own payment system and China’s only etc to challenge racist Jewish supremacist control of this planets monetary system. Challenge legally all these USA racist Israeli actions at the WTO etc. to bring them all down along with SWIFT
Make all American and Israeli companies etc. pay Russia in gold only. Heavily tax any transactions in Russia still using SWIFT and federal reserve dollars etc. No fly overs to Afghanistan to sort USA troops there etc., heavy taxes or bans on all imports from America and Israel as well as natural recourse exported to American companies like Boeing needs to make its jets etc., which they must pay for in gold only. Ban all American banks It companies etc. Withdraw or sell all Russian assets in America and Israel etc
What it is all about explained. 'Money as Debt" is made in Canada. 'The Secret of Oz" was made in the USA, Canada and Britain later and is 90 minutes with a longer historical perspective and more info making it the better of the 2 movies for this reason. Money as Debt I - Revised Edition 2009 (Full Movie) 1
Vasya Pypkin • Well, if USA wants to shot itself into head, by all means. Not being what it used to be undermining system and showing it cannot be relied upon and trusted. The sooner USA commits suicide the better. There is always the last straw. I hope those crazies won't take the world with them for a ride.
me Vasya Pypkin • It's not "USA," it's the totally Israeli owned, absolutely insane congress. It will implode on them and perhaps we, citizens, will then have the backing to expel the whole bunch, tell them to swim for Israel and put in a real American government.