Part 2: A simple question for NATO & Brussels: do you contain Putin by collapsing the European Union?
In this second part of today’s double-header, The Slog looks at the untold consequences of trying to bankrupt the Russian Federation, and wonders just how many Europeans would be prepared to pay that price. More specifically, the so-called sanctions present Germany with an insoluble dilemma. Cracks may soon start to appear in the entire EUNATO defence rationale.
Very few people really understand the full extent of collapse we will almost certainly be looking at if and when Russia defaults. Naturally, the propaganda sins of omission continue; thus, although there’s a gigantic problem for the sanctioning folks, they don’t want you to know about it. The BSDs out there need to rethink the current jingoism, and ask themselves whether the cost of “containing” Putin is either worth it…or indeed, a problem they need to worry about in the first place.
To kick off things off with an appetiser, you probably failed to notice this, but Russia paid its due debt installment in full last Friday.
You probably didn’t see that, because the MSM blanked it. They want you to think that Russia is doomed, but they can’t deal with evidence that this is not the case.
In the same spirit but on a different subject, what’s also just come to light via objective observers is that, since Russian speakers in the eastern Ukraine provinces Donetsk and Luhanks voted to leave and become Russian provinces again, 15,000 Russian speakers have died in blatant breakages of the Minsk accord by Ukrainian far Right nationalists. As this bores a large hole in the “plucky Zelenskyy” script, our media don’t talk about that either.
However, what they especially don’t want you to grasp is what one might call the German Dimension.
Germany plays a unique role in Europe (more exactly, the EU) – a multi-layered role understood by a minority in the US élite, and only very few ordinary Europeans. This involves three key elements above all others:
- A near autonomic fear response to the idea of hyper-inflation and its role in bringing Hitler to power
- An Ostpolitik approach to energy supply and trade
- A ‘bankers’ banker’ leadership role in the European Union.
The first of these is reasonably well-understood by everyone except the French who, along with Lloyd George, dreamt up the horrendous ‘war reparations’ repayment schedules at the 1919 Peace Conference in Versailles. Germany simply printed money to pay the debt, as a result of which all socio-economic assumptions became null and void, extreme politics flourished, and the decent German bourgeoisie were reduced to the dog-eat-dog desperation of hyperinflation.
At the end of the Second World War, the lesson had been learned: the US poured money into West Germany in a bid to help its economy rise from the ashes, to rub the Soviet Union’s nose in the reality of Western material success, and to ensure that Germany represented a strong bulwark against the USSR with a fully retained NATO nuclear presence.
When the 1955 Coal Agreement between France and Germany effectively gave birth to what became the European Union, the idea – an excellent one – was to make war impossible between them due to massive economic interdependence. Sadly, two bad ideas took hold at the same time. The first of these was a window-façade of democracy hiding a reality of top-down rule by anal bureaucrats (“so the People don’t make mistakes”) – something already enshrined in the French ENARC system; the second was a cynical Elysée desire to play upon German war guilt, and thus give France an easy ride when first EEC, then EC, then EU budget overspends began to materialise with monotonous regularity.
This is not a simplistic analysis: my second father in law is a prominent German industrialist who moved in circles more elevated than mine. Once the euro came into being, he confided in me that “Now at last we can stop picking up the tab for French largesse…if they want to stay in the eurozone, they will have to conform”. In fact, they decided to do no such thing: in the twenty-one fiscal years of the euro, France has never met the criteria for membership.
Chiefly because of this reality, Berlin has fought tooth and nail first of all to retain massive trade links beyond the EU (a classic example of ‘Alles Klar’*) and secondly, to keep its hands very firmly on the monetarist side of EU financial viability.
*‘Be prepared for all eventualities’
The ‘be prepared’ element of the German pysche enabled Willi Brandt to bring in Ostpolitik after 1969, under which Germany maintained some energy dependence upon the USSR while exporting high quality engineering products to the Warsaw Pact countries. Emotionally, it is important to realise that only Germany among all the big World War II players lost half its citizens to the victorious Sovyets.The result is that the now reunited Germany still looks East with far greater comfort than any other member of the original Common Market Six.
Unsurprisingly, it has in turn been unwilling to engage in the kind of brainless jingoism that so typifies the outbursts of Biden, Boris and Macron….of all those imposing energy and economic sanctions on Putin, Berlin has by far the most to lose. Thanks to EUNATO sanctions against Russia, for instance, German heavy engineering production has come to a virtual standstill.
What most people fail to grasp, however, is that this is as nothing compared to the German responsibility for any and all consequences of Russian debt default.
We’re back in the “Heads we win tails you lose” Wall Street/City/ Defense/Frankfurt firms, their stupid intra-bank trading mechanisms….and the pernicious use of “safe-bet” Credit Default Swaps (CDSs) – which are usually safe for them, but can be disastrous for Sovereign borrowers. The accepted reality of CDS profits being in inverse proportion to sovereign economy survival tells you just how sick financialised globalism is. And it’s sociopathic NWO outlook – its Weltanschauung – is in perfect lockstep with the Davos Dystopians.
But here’s the problem we’ve had since the tinpot euro was launched: there is no sovereign body in the European Union. So in order for “normal” hahaha lending business to continue, some mug has to step up and put it’s house on the line.
Step forward Berlin.
Quite how this happened is a ball of knitting wool assaulted by a determined kitten. The EU borrowings are in theory guaranteed by a number of states, but there’s only one the vultures trust: Germany.
The files describing how this came about run to over 5,000 pages. Bizarrely, they’re secret: as the German site Koncept-Veritas avers, “Nobody has ever read them, let alone understood them”. There’s a very good reason for that: the ridiculous intra-bank CDS trading means that nobody has the faintest idea what their values are any more. All we do know is that, to use the complex fiscal terminology re this one, they are UFH – Unimaginably Fucking Huge. If, at the next call, the Russian Federation pays again in Roubles not Dollars, a waiver will be triggered, and a default declared.
Dr Wolfgang Hetzer was responsible for the fight against corruption in the European Anti-Fraud Office in Brussels. He knows only that if a waiver is presented, the Deutsche Bundesrepublik has to pay. Hetzer explained very clearly in an interview with Die Welt, “The perpetrators are those in the financial industry who make bets with help from profiteers in politics, who do nothing to put the investment bankers in their place.”
Welcome to the wicked world of corporacratic impunity.
The bottom line is this: the German government faces an insoluble dilemma. If and when the RF defaults, the Bundesrepublik will have to pay (or in reality, write off) Russia’s debts – otherwise the EU banking system, and much of its economy, will implode.
Nobody knows if Germany is in a position to do that….or indeed, if Berlin has the slightest intention of even trying. But given the catastrophic disorder and EU collapse that will result from a Russian default, Vladimir Putin is very probably sitting in the Kremlin and thinking, ‘OK wiseasses….bring it on’.
The risk is being underplayed by Wall Street; Bloomberg, for instance, talks of Russia having “very little foreign debt” – figures of $120bn are bandied about, which is less than the UK spends on the NHS. But they know perfectly well that this definition is narrow.
First of all, that is pure sovereign debt. Corporate debt on top comes in much higher at around $480 billion. Second, 90% of the debt is owed to Eurozone banks. And third – most important of all – trading in CDSs by the banks between each other and Hedge Funds may have, over time, made them much more ‘valuable’. “I worry about what I do not see,” the World Bank’s Carmen Reinhart says, “Financial institutions are well-capitalised, but balance sheets are often opaque … There is the issue of Russian private sector defaults. One cannot be complacent.”
The truth is, nobody knows at any given point in time how much a CDS lay-off is “worth”. Nor do they know who the final holder of the CDS might be. A loan obtained from (say) Santander Bank may well be held by the Hedge Fund Pimco.
Also, CDSs are “infectious” in the banking system itself. Every CDS trade will reduce risk on one side and increase it on the other. The banks, hedge funds and banking firms are supposed to nil “cancel out” high versus low CDS risk. Experience in the past, however, has shown that their estimates of risk balance are so much hokum most of the time.
In a nutshell, driving Russia into default risks a nuclear chain reaction that is impossible to predict….and anyone telling you otherwise (eg the Pentagon) is lying.
Ultimately, NATO could well find itself sitting in Europe alongside bankrupt donators, and wondering what to do next. Somehow, I doubt very much if media demonisation is going to cut it in that context. But I am very clear on the fact that the Great Reset numpties haven’t done proper due diligence on the outcome….and even where they have, you can rest assured that the audit guys were lying to them.
I further suspect that the fat idler in Downing Street lacks the focus to grasp any of this reality. This is a case of being hoist by both petade and facade: if you are mad and megalomanic enough to create a globally connected Ponzi scheme that is palpably unsustainable, then you deserve everything that follows.
The ordinary citizen, however, deserves none of it. Such considerations are of no interest to the Dystopians….and we of the 1in8 must face the strong possibility that total European financial collapse is exactly what these lunatics have in mind.
As usual with the MSM, there are no insights to be found in relation to this fiscal dilemma for Berlin. The FT – in a “major article” six weeks ago – failed to even mention Germany’s EU debt responsibilities, choosing instead to trot out some classic Washington smear-fat:
‘In the first crisis of the post-Merkel era, Germany is floundering. The complex legacy of the second world war is weighing on its efforts to craft a coherent policy on Russia. A new government in office for only seven weeks is being pulled in one direction by its powerful pacifist lobby and in the other by Washington…critics say Berlin has failed to grasp the enormity of the threat Russia poses to Ukraine. They worry that Germany, which draws 55 per cent of its imported gas from Russia, cares more about the impact sanctions will have on its economy than about forming a united front against Moscow. Some NATO countries have even begun to doubt that Berlin is a reliable partner.’
The FT pesters me regularly to return to its fold of paid subscribers. Its owners need to grasp that nobody with half a brain wants to pay in order to have a spurious CIA global hegemony line played back to them. There is, as in so much of this, the desire in Washington to defend Europe down to the last European.
If this Slog double-header goes anywhere around the internet, you can be sure that the experts, fact checkers and opinion leaders will say I am vague on the arse/elbow arrangement. If they do, we will know that cages have been rattled.
As I write, to all intents and purposes the Ukrainian port of Mariupol has already fallen, and the Russians are trying to negotiate a ceasefire under which non-combatants can be escorted to safety. The Western MSM are “covering” this story as – and we’re talking the BBC here – ‘Russia is trying to starve the besieged port city of Mariupol into surrendering….the residents having endured weeks of Russian bombardment with no power or running water’.
It’s odd is it not how ‘flunkey’ Western State journalism covers a story by covering up. Russia invaded Ukraine exactly three weeks ago today, and only reached Mariupol three days ago on 18th March. So it’s a tad tricky to see how the residents have been pounded and starved into submission during ‘weeks of Russian bombardment’.
In conclusion, there is one depressing certainty in 21st century life: our economic system, US democracy, EU fiscal stability, media investigation, bureaucratic rules, banking credibility, corporate governance, NATO information, health science, civil policing, military intelligence and financial sectors are all irreparably compromised by greed, mendacity and unachievable globalist megalomania.
As you might have noticed, I am not a man subject to false optimism: in the world of 2022, such an outlook will lead only to lazy compliance. There are good, true and socially beneficial ways to break down the overweening confidence of diabolical ideas. But running away, staying melded to the sofa and hoping for the best is not going to be enough.
The only thing necessary for the triumph of evil is for many good men and women to do nothing.