Martin Zeis, 20.10.2015
Pepe ESCOBAR, well-known geopolitics-in-depth-writer, recently published an article Moscow doubles down on Washington (RT Op-Edge, Oct 15, 2015), reprinted by zerohedge.com (Oct 19, 2015) – entitled: Collapse Of The Western Financial System Looms As A “Strategic” Russian Default Is Possible.
Escobar refers back to a widely (except for the German speaking media, inclusive the alternative and critical-of-the system ones), discussed Report “On urgent measures to strengthen the economic security of Russia”, first presented at the the inter-ministerial committee of the Security Council, which, after reading passed it to the “Grand Council” chaired by Russian President Vladimir Putin. Included proposals for the change of economic policy were prepared under the supervision of the Presidential Adviser Sergey Glazyev, although not by him alone, but by a group of about fifteen associates. Most of them belong to the domestic scientific community, moreover, the adviser to the president is a member of the Academy of Sciences. *
Below excerpts of Escobar’s piece are documented. Both, complete article and Glazyev’s report (33 p), are attached (pdf-files).
Collapse Of The Western Financial System Looms As A “Strategic” Russian Default Is Possible
By Pepe ESCOBAR
History may eventually decide the ‘New World Order’ started on September 28, when Russian President Vladimir Putin and US President Barack Obama had a 90-minute face off at the UN in New York.
Irrespective of spin – “productive” according to the White House, “tense” according to a source close to the Kremlin – facts on the ground accumulated almost immediately.
Putin did press Obama for the US to join Russia in a real grand coalition bent on smashing ISIS/ISIL/Daesh. The Obama administration, once again, relented. I detailed here what happened next: an earth-shattering game-changer in the ‘New Great Game’ in Eurasia, straight out of the Caspian Sea, that caught the acronym fest of US intelligence – not to mention the Pentagon – completely off-guard.
So this was Putin’s first message to Washington, and the Pentagon/NATO combo in particular; your fancy ideas of stationing tactical nuclear weapons or expanding missile defense to Eastern Europe, or even Asia-Pacific, are just a mirage. Our cruise missiles are capable of wreaking real effective havoc; and soon, as this piece argues, there will be more hypersonic, high-precision long-range missiles added to the mix. (…)
But then there’s also Putin’s second – silent – message to Washington, which didn’t even have to be delivered in person to Obama. US intel though may have a hint about it, as they closely follow Russian media.
It’s about Sergey Glazyev’s (presidential aide) plan for Russia’s immediate economic future here is a summary of the plan, in Russian. The plan was formally proposed to Russia’s Security Council. Here is a very good summary on how Russia’s Security Council works.
There are at least three absolutely key points in Glazyev’s plan. We may summarize them like this:
- If the emerging trend of freezing private assets of Russian legal entities and individuals continues, Russia should consider full or a partial moratorium on the servicing of loans and investment from the countries involved in the freezing.
- The amount of foreign currency assets of the Russian Federation located in the jurisdiction of NATO countries accounts to more than $1.2 trillion, including short-term debt of about $800 billion. Their freeze may be partially offset by retaliation against NATO assets in Russia, which amounts to $1.1 trillion, including over $400 billion long-term. So this threat would be neutralized if Russian monetary authorities organized a timely withdrawal of Russian short-term assets in the US and the EU.
- Glazyev is adamant that the Russian Central Bank continues to serve the interests of foreign capital – as in the financial powers in London and New York. He contends that the high interest rates practiced by the Russian Central Bank led Russian oligarchs to borrow more cheaply from the West, making the Russian economy dependent, a debt trap which the West used to slowly squeeze Russia. Then the rigged Western oil and ruble collapse increased the pressure as debt service in ruble cost and interest doubled. (…)
The fact is Russia has lost access to Western credit and cannot roll over its debt with the creditors. So Russia will have to pay the principle and the interest as it comes due. That is a trillion dollars plus interest. Russia also cannot import anything from the West without paying double for it. So arguably the country may be now in the very position it will be if Moscow opts for default. Thus, Russia would have nothing to lose by a default – as the damage is already done.
A shock to the system
Essentially, once again, a Russian default on a $1 trillion-plus debt to private Western parties remains a possible scenario discussed at the highest level – assuming Washington will persist in its anti-Russia demonization campaign. (…) — emphasis zerohedge —