Cameron Lashes Out Against Putin – Prepare for World War III
David Cameron and Vladimir Putin met face-to-face talks in June. Now Cameron is towing the US line and is speaking out to NATO warning it is “unprepared for Russia threat”. Cameron has told NATO that it seriously needs to rethink its long-term relationship with Russia. British Prime Minister David Cameron has warned that Russia’s “illegal” actions in Ukraine must be met with a message that“neither Nato nor its members will be intimidated”.
Cameron has suggested a new schedule of military exercises, which effectively do nothing but strut around and say see, we are here. Historically, such actions have never been effective in any crisis.
Putin is from the old world. He has called the collapse of the old Soviet Union Empire as the most tragic event of the 20th century. He is still an old world type guy who sees the size of Russia is more important than its economic might. Expanding Russia makes him popular at home and he has the support of the Russian Orthodox Church – something no previous Russian leader had since the Czar. Nevertheless, war is simply inevitable for sanctions are an in-your-face type of attack and that cannot be effective for Putin must not back down publicly.
This is where lawyers running countries are just out of their league. They look at law, not substance, and have no comprehension of how to deal with people on the street. The only possible way to defuse World War III is to now hold a summit and sorry – the West must be seen as also caving in. Without that, there is no resolution and war will be here before you know it.
An international summit designed to change the mind of Putin that territory is not strength requires accepting Russia into the fold and opening up trade so his people can benefit. The other aspect that has to be dealt with is the Russian Oligarchs. Free enterprise has to be allowed in Russia for its economy to grow. If you try to open any restaurant in Moscow, good luck on trying to buy life insurance – you will be dead by morning. This is what has been preventing Russia to rise to the top as we see in China. Russia could beat Europe in a heartbeat economically if it just dealt with its Oligarchy.
Without a summit with sound economic resolutions, there is no hope to prevent war. Even in the West, the EU simply wants to federalize Europe to save the Euro which they never designed properly to begin with. The USA is caught up in a pension crisis that will explode in everyone’s face and the entire socialistic agenda of taxing the rich and never reducing the cost of government is shrinking the economy. The collapse of the economic system of perpetually borrowing and never paying anyone back is crumbling before our eyes. As a result, the West needs war to prevent revolution.
It is far better to understand what is coming than to be the dumb and blind who are too caught up in watching TV and sports to bother paying attention to where Ukraine even is. As Saint Jerome said of Rome, when that Empire Fell, the Romans were still laughing watching their games.
The Shift from West to the East
The computer has done a pretty good job on forecasting the markets, but also the rise in the Cycle of War that seems to be exploding absolutely everywhere. All I can do is articulate what it is forecasting for nobody could possibly make such a forecast years in advance based solely upon opinion or even looking at a single region. Socrates even nailed down Ukraine and specifically targeted Crimea as the flash point that historically has been the launch pad for so many things right down to the entry point for the Black Death or Plague.
Nonetheless. another forecast that has been amazing is the rise of China and the shift of power from the West to the East. While everyone has been watching the geopolitical events in Iraq grabbing the headlines and the story in the Ukraine intermixed with the rising war in Gaza contrasted with on the business front the as the New York Stock Exchange displays the correction that the computer even pinpointed for July and to the week, there is another major trend that is subtle, yet confirming our long-term model.
Right now in the world we are watching a fundamental structural change taking place that is quietly and completely displaying the collapse in the West’s economic power. We are in the final stage of the rise in the dollar as war rages and the confrontation between the USA and Russia unfolds. These sanctions are the kiss of death long-term and will be what history marks as the straw that breaks the back of the United States’ economic power.
I have been writing for the past several years that the Financial Capital of the World will shift to China and the USA is in the final stage of its rise and fall. The sanctions against Russia are stupid and they will destroy the economic growth of the West while shifting not just Russia, but many toward China. This is the shift of wealth and power to the east, the rise of the Yuan and its use in a growing number of global transactions in the place of the dollar. At the moment Russia is turning its economic head towards China and the developed world doing its best to do so too. And still the east is gaining ground and its share of global cash flow continues to expand. This is set to continue strongly in the broader-term, albeit near-term there is still an economic decline for China from which it will rise faster and stronger than the USA.
The Russian sanctions are stupid and brain-dead. They are the tipping point in the broader-trend. These developments are sending warning signals to us not just that the developed world’s share is waning, but the grip on the world’s currencies will shift to a new one-world currency to replace the US dollar over time inasmuch as a reserve currency. Not only is the threat to the dollar’s hegemony growing from the Yuan, but key to that role, is by no means the oil price dominance as so many pretend, but the ability to park money. The real danger going forward will be the sovereign debt crisis. Once the world pension funds wake up and smell the flowers before the casket is closed on public debt, where money resides will become the real key in the years ahead. It is not the petro-dollar that people focus on when trade is such a small portion of global capital flows, but the ability to park trillions of dollars in assets in the US government securities. Once the sovereign debt crisis becomes more open following 2015.75, the game will change once again. (seeDVD on Sovereign Debt Crisis).
We are moving rapidly to the next evolutionary step in money – the electronic currency and the elimination of paper currency. I reported that public transportation in London did away with currency starting this month and in Manchester one street all the stores agreed not to accept currency – only plastic. The younger generation already prefer to pay with the cell phones. They do not see gold and oil in the same light as their parents.
The immediate rise in the US to oil self-sufficiency, shrinking the threat from the future oil market to the dollar oil price, is changing the game a lot in the real capital flows that have led so many to view the strength of the dollar based solely on the fact that commodity trading takes place in dollars. . But this is extremely critical to the US because it changes the political landscape as well. This reduces the power of the Middle East and it is a key factor in the US attack upon Russia with Europe shifting its focus to the US for energy. Meanwhile, even the price of oil has been declining while natural gas rises. Those who still live in the old world believe that the US has to retain dollar hegemony primarily because it runs a constant Trade deficit. Even this they fail to understand for the more investment flows into the dollar, that is recorded only in the Capital Account while all interest, dividends, and profits on US investment flow through the Current Account and that confuses analysts who cannot understand the strength behind the dollar with a Current Account deficit they improperly label as a Trade Deficit. The create while scenarios claiming that if the USA is required to pay for goods in currencies other than the dollar, then the dollar just has to decline. These analysts do not understand the statistics for if they did, they would see that trade is less than 10% of global capital flows. The dollar’s role as the sole global reserve currency will remain for now not based upon trade, but its depth to park capital. That is NOT under threat by Europe, Russia, or China. It matters not what currency trade takes place in, when that transaction is complete, where do you park your money?
The structural shift from the West to the East is underway and long-term we will see the loss of USA economic power over global financial markets only when there are deeper markets in Asia and the dollar loses its reserve status. Then we will see the decline and fall of the United States and the rise of China as the new Financial Capital of the World. Ultimately, the US dollar will lose its power to China and the very decision the Obama Administration are making today with the sanctions against Russia will be the tipping point in history. We will see that not just Russia shifts to China, but an increasing number of countries will start to do the same. The Obama Administration and its abuse of the NSA, IRS, and CIA, has displayed to the world its arrogance and that is precisely the same reason Athens lost its Empire in ancient times. All of its allies eventually turned against Athens because of its arrogance. Obama has unleashed the NSA upon the world and we are seeing the very same historical trend unfold.
China already has $4 trillion in its reserves and its growing ability to trade in the Yuan and not the dollar increases its security from any US action to curb its financial power in the world or trade sanctions as it is doing to Russia. As Russia turns to the Yuan, others will follow particularly when New York prosecutors are imposing dramatic fines on European banks for trading with Iran simply because the transaction took place in dollars. This abusive prosecution and threats of actions to prevent BNP Parisbas using the US dollar will have significant blow-back as all our sources confirm that foreign banks are now looking to shift transactions away from the US dollar because of US arrogance. The NY prosecutors are part of the shift in power for they are encouraging foreign banks to do transactions in anything EXCEPT dollars to limit liability.
The Obama Administration lost its ability to invade Syria because CHINA said now. They woke up and realized that the downside of the deep market in the dollar and its reserve status has been the clipping of its wings in the political circles. The only recourse the China has over USA will be over that $4 trillion it has in its reserves. This prompted the Obama Administration to suddenly feel the pain of Americans for retirement in January after Russia defeated the US invasion plans for Syria days before. (see Reuters) . Obama suddenly told the public out of the clear blue all designed to bring the debt home to regain political power – that is all.
Let’s do more to help Americans save for retirement. Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401ks. That’s why, tomorrow, I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It’s a new savings bond that encourages folks to build a nest egg. MyRA guarantees a decent return with no risk of losing what you put in. And if this Congress wants to help, work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little to nothing for middle-class Americans. Offer every American access to an automatic IRA on the job, so they can save at work just like everyone in this chamber can…
The insane expectation that if oil trades in yuan the dollar will be dead shows the lack of understanding with respect to the entire global economy and the limited role of trade. The liquidity of the US dollar market does prevent the easy use of any other currency and even the liquidity of the euro, sterling, the Swiss Franc and then Yen all combined together with the arrival of the Yuan, still cannot displace the dollar on the global scene. The Yuan is less than 9% of trade and that has passed the euro. The sufficient liquidity is not trade, it is the ability to park capital.
Oil is also being rapidly replaced with the introduction of hybrid cars. The BMW I8 coming out this year is ready to revolutionize its vehicle class. As the first sports car with the consumption and emission values of a compact car. The strength of the plug-in hybrid lies, among other factors, in the perfect synchronization of electric motor and combustion engine, which makes itself apparent in maximum efficiency and dynamics on the road. The first sports car that even accelerates the zeitgeist. This is what BMW is doing at the high-end of the market in sports cars. This does far more than people realize. It takes away the stigma that an electric car is weak and slow.
So it is in this context that the importance of the situation in Iraq now becomes of disproportionate importance to the monetary world. The entire theory behind the dollar will collapse if oil is traded in Yuan or Euros is up there with Global Warming – stringing together facts that are only a tiny fraction of the picture.
Here is a picture of an electric car plugging-in to charge in London as it parks. This is the trend and we are not going to see oil play as big of a role in shaping the world economy as it has in the past. We are already moving in the direction of alternative fuels and as such, those still harping about the Petrodollar are like those who still believed the world was flat after Columbus returned home. Hence, Middle East is fading with eyes that are neither geographical nor political. We have to look at the religious battles going on there and understand that this is part of the War Cycle – not economics. Nonetheless, its impact must be understood because the USA will still see this region as important because of Israel and in its battle against Russia.
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