Monday, January 19, 2015

Sanctions to Self-Preservation: Prelude to War

Sanctions to Self-Preservation: Prelude to War
By Erick San Juan

Swiss National Bank (SNB) removed its exchange rate cap vs. euro. Swiss has been supporting the global exchange rate of EU (European Union) with its own money. Due to deflationary pressure, the Swiss economy is affected by the poor economy of the European Union despite the European Central Bank overprinting of money and quantitative easing policy through Outright Monetary Transactions allowing ECB to directly buy sovereign debt. Swiss National Bank feared that it may hold worthless euro paper money. This is the perceived reason by economic analysts and columnists  why SNB broke away from ECB, FED and IMF for self-interest. Like a coup, an element of surprise, it undermined the credibility of the global exchange rate stability or the Old Boys Club. (John Mangun, 1/17/2015)

This move by the Swiss National Bank is just the beginning.  Expect more desperate moves on the global economic chessboard in the days ahead.  But in the end, none of those moves is going to prevent what is coming.

And one of these days, another extremely important currency peg is going to end.  Right now, the Chinese have tied their currency very tightly to the U.S. dollar.  This has helped to artificially inflate the value of the dollar.  Unfortunately, as Robert Wenzel has noted, someday the Chinese could suddenly pull the rug out from under our currency, and that would be really bad news for us…

In other words, the SNB is no People’s Bank of China type patsy, where the PBOC (People's Bank of China) has taken on massive amounts of dollar reserves to prop up the dollar.

Will the PBOC learn anything from SNB? If so, this will not be good for the US dollar.

So keep a close eye on what happens in Europe next.

It is going to be a preview of what is eventually coming to America? (Michael Snyder, 1/18/2015)

While in India, Raghuram Rajan, the Central Bank head shocked India last January 15 by unexpectedly slashing the benchmark repurchase rate to 7.75 from 8%. He predicted the 2008 global financial crisis, he warned that world’s major economies were flirting with deflation. The threat of global secular stagnation and lower prices in India prompted him to act. (William Pesek, 1/17/2015)

The above-mentioned scenarios are descriptions how world wars predicated, that is, laying the predicate towards a global conflict just like during the Great Depression era. A déjà vu?

Nations’ banksters and big business are partly to be blamed why nations are pushed to the wall and in the process, engaged in war preparations.

While in Russia, credit rating agencies are doing the ‘dirty works’. In the article by Andrew Korybko he writes, “Credit rating agencies are predicting quite a storm for the Russian economy, and they are therefore threatening to lower the country’s status to ‘junk’ level. Just as a weatherman may be incorrect about their storm predictions, so too a ‘financial meteorologist’, except the latter has ulterior motives in doing so.

Standard and Poor has joined Moody’s in launching an attack on the Russian economy, hoping that the threat of lowering Moscow’s credit status will somehow translate into political changes in Eastern Europe. Although such an idea may seem plausible in theory, in practice it’s absolutely disjointed from reality and merely symbolizes the third wave of the economic war on Russia. This coming economic storm, cooked up in the West, is going to come up against the multipolar storm breaker of Russia and China’s own Universal Credit Rating Group (UCRG), expected to become active later this year. When the waves inevitably crash, the West may find that it has unwittingly and irreversibly damaged its own unipolar economic defenses and opened up a flood of multipolarity.

Russia and China, the two anchors of the multipolar world via the Russian-Chinese Strategic Partnership, are taking the initiative in creating an alternative institution to counter the West’s politically motivated economic ratings. This creates more openings for the actualization of full-spectrum multipolarity, whereby this concept makes the leap from the geopolitical to the institutional, with the long-term potential of rivaling (and perhaps unseating) the West’s ‘supremacy’ in the targeted fields. Importantly, however, this entire episode portends the division of the world into two camps, with the unipolar and multipolar worlds slated for their inevitable face-off sometime later this century.”

Such sanctions could only spell trouble for the world’s economy when sovereign nations like China and Russia are pushed to the wall, the only way out to self-preservation might lead to war.  

1 comment:

edutrekker said...

Interesting reading, I recently read an article about this.
Will China Pull a “Switzerland” on the U.S. Dollar?