Anarchistbanjo's World

In a world of continuing disinformation I struggle to understand and interpret what is really going on in this newly ascended world. This series of posts attempts to get to the bottom of things. This particular post is going to deal with Russia and the collapse of the global banking system.

In an earlier post I mentioned that if you wanted to really know what was going on with the Russian-Ukraine war all you needed to do was check the daily valuation of the ruble vs the US dollar. That will tell you everything.

Obviously the United States and the European Union countries placed a blitzkrieg of sanctions on Russia in an effort to totally destroy it. The steps taken in sanctioning Russia have been unprecedented and make Russia the most sanctioned country in the world. It was a classic example of attempted “overkill” that didn’t work!

It is also obvious that the United States and the European Union expected these sanctions to work. There was never any intention to fully cancel trade with Russia, especially its fertilizer, natural gas and oil supplies which are needed. That expectation is why they have kept doubling down on the sanctions. They expected Russia to break down and kick out Putin.

But the sanctions didn’t work and the Russian ruble is stronger now than it was before Russia invaded Ukraine. The ruble is now pegged to the price of gold and will soon be totally gold backed. Russia just announced that it will be issuing a digital ruble next year. Russia is now totally determined to sever all connections with the west and is creating new trade partners and new supply routes in the east and to the south. It has no intention at all of keeping up its trade connections with the United States and European Union. At best it will keep supplying them until it no longer needs to. . . which might take a few years.

The European Union just finally realized that Russia is going away and they still need Russian natural gas and oil supplies for at least a few years. To make matters worse it appears that Russia and the other BRICS countries are in the process of abandoning the US dollar as a reserve currency. They are creating or have already created their own version of SWIFT money transfer system and leaving the old system because the US has illegally frozen or confiscated Russia’s foreign reserves.

I’m not an expert on these things but I read that if the valuation of the ruble went below 75 rubles to the US dollar it would mean that the US dollar was losing its value as a reserve currency. This past week the ruble was valued at 74.0 rubles! Nations and individuals are starting to ditch the US dollar and invest in commodities or real estate. As the old financial system and the newly evolving financial system struggle to exist side by side there will be a financial blood bath as worthless paper currencies and paper commodities such as “paper gold” vanish as investors seek to withdraw non-existant gold from the system. The ultimate end result will be other countries adopting a gold and commodity backed national currency of their own. This new system will not be based upon “debt” but upon “owned resources” such as commodities.

The US dollar is not backed by anything and the US is 300 trillion in debt. The international banking system based upon fractional reserve banking practices which includes stocks, bonds and derivatives is in an existential battle for survival against the upcoming gold and commodities based financial system that is being created by Russia and its allies. These two systems are not compatible with each other at all. As a nation Russia has almost no national debt to speak of and is rich in commodities and natural resources.

I suspect we are going to see an end to the Russia-Ukraine conflict fairly soon because the next move by the United States and European Union is probably going to be to mollify Russia and attempt to salvage what trade it can. But this will present its own problems because the United States and European Union have painted themselves into a corner from which there is no escape or easy answers.

The damage to the economy and supply chains has already been done and new trade routes have been taken. There is no going back! All the United States and European Union can do now is to slow the process as much as they can. They already know that they have lost the battle!