Twenty-five years is a long time to get back to where you started, but two-and-a-half decades after the collapse of the Soviet Union, it is the United States, not the Russian Federation, that has succeeded in restoring the threat of nuclear annihilation to the global conversation. And, by means of economic sanctions, energy-infrastructure intrusions, and financial manipulations, it is the U.S. that has returned Russia to a state of isolation from Europe.
Having pulled the Ukrainian door to the motherland off its hinges by means of engineering a coup in Kiev over two years ago, the U.S. foreign-policy establishment has followed up with an expansion of NATO to the very borders of Russia. The thinking appears to be that where American provocations to bait Russia into invading Ukraine have failed, perhaps two new missile bases in Rumania and Poland and four new army bases in Eastern Europe and the Baltics will do the trick.
None of which is to say that the globalists don’t sense the danger; they do. But it’s not the danger created by their own offensive actions they fear: It is a volatile electorate that is signaling they have had enough of Washington’s useless wars and costly meddling abroad that has them shaking in their boots. If the New World Order crowd is to succeed in propelling their fully paid-for agent, Hillary Clinton, into the White House come November, it is vital that they keep any serious discussion of U.S. foreign policy out of the campaign chatter.
The only light in the foreign-policy closet has been Republican presidential candidate Donald J. Trump’s opening the door a crack and taking a peek. Trump has suggested that perhaps NATO is no longer needed, or at least not in its present form. (If he had only stopped his thought at the halfway mark, it would have been a flawless statement.) Other heresies Trump has advanced include striking a deal with Vladimir Putin for their two nations to buddy up and eliminate ISIS together, an idea the Russians have long advocated. Overstepping the common narrative even further, Trump wondered aloud if the crisis in Ukraine wasn’t really Europe’s problem to solve, and whether Russia’s annexation-by-referendum of Crimea shouldn’t be accepted as the will of the people of Crimea.
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With the stage being set for Cold War II, Americans ought to be asking themselves just what they got out of the original. What exactly was their government’s game all those years, so long ago now as to be forgotten? Were all the serial wars, violent coups, proxy wars, and orchestrated regime changes actually undertaken for the beneficial extension of “Americanism” worldwide, as the state’s propagandists insist? Not a chance. If spreading “Americanism” hither and yon were the point of U.S. foreign policy, then the federal government’s domestic and mass-immigration policies would not be designed to destroy what precious little remains of it.
What the United States actually exports is a predatory financial system centered on the paper dollar as the single international reserve currency. The system was put in place at the end of World War II, but the scheme’s international component emerged from John Foster Dulles’s adventures in the interwar years arranging highly profitable loans for his Sullivan and Cromwell clients—Brown Brothers, Lazard Frères, Goldman Sachs, J.P. Morgan, and the First National Bank of Boston—to mostly German banks, a scheme exposed by Stephen Kinzer in his book The Brothers(Henry Holt & Co.). The pickings were so good that he and his clients were soon force-feeding loans to a wider customer base that included mostly German cities and administrative regions, frequently entities that weren’t actually in need of the money. What are known as the “Bretton Woods Institutions” (the International Monetary Fund and the International Bank for Reconstruction and Development) had found their ideal model—i.e., lending to a defeated but economically competent or resource-rich adversary saddled with war reparations or excess borrowing.
Assorted international political parasites couldn’t resist such a gusher of profits and quickly adapted Dulles’s scheme to the government’s and American big banks’ needs by replacing Sullivan and Cromwell’s private investors with American taxpayers, who, unlike Sullivan and Cromwell’s clients, were in no position to object or qualify the institutions’ lending. In the future, corporations and the big banks would contribute to an institutional lending stream of public money and thereby guarantee their loans through the back door. A borrower could default or delay, but taxpayers unwittingly ponied up the vig for the entire loan, which the institutions would promptly roll over into a new and larger loan.
When European borrowers lost their appetite for borrowing, the institutions created a new, super-easy money facility that allowed them to venture into the developing world with disastrous results for borrowers whose leaders, as anticipated, promptly confiscated the lion’s share of the sums and sent them far, far away to their private Swiss bank accounts.
It was in this same era that the ideas John Maynard Keynes advocated in The General Theory of Employment, Interest, and Money (1936) caught fire. Keynes’s treatise is a confused political theory masquerading as economics that provides a rationale for systemic government intervention into markets, and, most critically, for central banking, which, in turn, is the engine of government growth.
Keynes’s scam seized the rather dull imaginations of academic economists, who went on to draw many decades’ worth of fat Fed paychecks for their service in extending, elaborating, and explaining Keynes’s convoluted ideas—ideas that turned the laws of classical economics upside down. For example, savings are not the only source of investment capital a nation can rely on since foreign capital flees at the first sign of trouble; rather, savings are a burden on the national economy. Investment and spending capital could more usefully come from the printing press, the product first being lent out at interest. What matters is consumption and spending, not saving, and consumption precedes production, which itself is stimulated by the public’s perpetual desire for more.
Though communism never stood a dog’s chance of establishing itself in the hyper commercial United States, Keynesian socialism, alas, proved an all too easy sell. The real threat of Cultural Marxism crept into American life unnoticed by means of left-wing academics, who slowly corrupted first American universities and later a federally controlled public educational system. The ideas governing Keynes’s corporate state—ideas he admitted in the Introduction to the German edition of his treatise were far more suitable to “the conditions of a totalitarian state” like National Socialist Germany than to “conditions of free competition and a large degree of laissez-faire”—encouraged the people to consume their future today. Thus, the concise four-word summary of World War II: Germany lost; fascism won.
The debt would never come due, the government assured the people, insisting that it was just an accounting entry, since “we owe it to ourselves.” The real threat, Americans were told, was monolithic Soviet communism.
American politicians had learned that the post-World War II system based on the U.S. dollar allowed the federal government to run massive deficits. Foreign countries held their reserves in dollars per the Bretton Woods agreement, and the federal government solemnly pledged to back the dollar with gold. To be half of 70 percent of every international transaction conveys incomprehensible economic power.
Foreigners give us real goods and services, and in return, we give them paper notes with engravings of dead politicians on them at an approximate cost of three cents per note. In brief, we were able to import cost-free, and foreigners were able to sell into the largest, most voracious consumer market on earth. Everybody—consumers, exporters, and importers—reveled in the artificial prosperity.
When what Keynes had insisted could never happen did happen in the 1970’s, the era of stagflation, his theory fell out of fashion, but its tools were never set aside. Deficits continued their upward spiral.
There are many flies in the monetary ointment, but one—the Triffin Dilemma—isn’t mentioned very often. In the 1960’s, Belgian economist Robert Triffin perceived the system’s Achilles’ heel: debt saturation. In 1971, the system did indeed back up, when the dollar reserves European exporters had been stashing back home were exchanged for U.S. gold, thereby lowering the value of the dollar. The solution Washington opted for was to jettison gold. In the future, foreigners’ dollar profits would be recycled into the purchase of U.S. sovereign bonds.
The dollar skyrocketed, but that phenomenon was and is a consequence of foreigners’ need for liquidity in a market meltdown, a time when every country, including the United States, needs a weak currency. Rather than being a sign of economic health, a steeply rising dollar can instead be a sign of debt saturation.
Owing to the economic and military might of the United States, the reserve-currency status of the dollar actually grew in acceptance. By the late 1980’s, under the Reagan administration, the United States went from a creditor to a debtor nation; but given the country’s status as the planet’s largest market, it might be more helpful to say that the U.S. became the only vendor-financed country on earth.
In 2007, when it happened again—despite the floating-rate regime established in 1971—the solution was to bail out the profligate money-center banks with upward of $700 billion of taxpayers’ money and then drive yields on U.S. Treasuries to near zero. Having accomplished not much besides doubling the U.S. national debt to some $20 trillion, central bankers have begun instituting negative rates, meaning depositors must pay the banks to hold their deposits, a situation that has never obtained in 5,000 years of recorded history. As the world approaches debt saturation yet again, Fed bureaucrats, academics, and media mouthpieces are shilling the suffocating solution of dispensing with cash entirely. All transactions will be processed through the banks, each transaction recorded for every government’s taxman.
Our wondrous new technologies will mean not only our finances and daily purchases will be tracked, but so, too, in real time will our physical movements, all our written and spoken thoughts and all our interactions with one another be recorded. Our files will be handed over to the behavioral economists at DARPA, who will then devise individual algorithms that will both police and guide each of us.
In other words, the price for nearly seven decades of Keynesian-approved central-bank swindling will be a universal tyranny such as the world has never seen. And there will be no escape but that of the grave.
But even universal tyranny isn’t the full price that might be paid. To what purpose did the federal government put the national largesse? Well, first the government instituted socialism in exchange for votes because it could. Socialism has corrupted Americans just as readily as it has populations wherever it’s been tried. Easy pickin’s married to our high consumption levels have left us obese, dull-witted, and our jobless children seeking “safe spaces” over the challenges of life and debate.
The other endeavor for which our corporate state put its shoulder to the wheel was the building of a permanent war machine economy, which relies upon an extravagant global system of foreign military bases, paper money, a network of domestic arms manufacturers that ensures at least one producer and his well-paid employees are situated in every congressman’s district, and the requisite consumption of some hapless but resource-rich country every several years or so.
The national bonus, our lame-duck President informs us, is that we need to spend a trillion dollars upgrading our nuclear defenses, for which our military doctrine now claims first-strike use. Universal tyranny may well be the least of our troubles.
There is only one country on earth that has declined to step into the Triffin Dilemma. Yes, that’s right: Russia, whose debt is negligible and who has managed the ruble well through the storm of troubles the U.S. and a shamelessly pliable Europe have sent her way over the last several years, while determinedly resisting the siren calls of the money pumpers and building financial institutions and structures independent of those of the West. Russian prudence and increasing gold reserves will prove to be one of the nation’s greatest assets in the Great Default to come, but, like death, no man knows when or where it might come.
At the Cold War’s end, for the third time in the 20th century, the United States squandered the peace, bit by precious bit, like a carefree boy skipping stones on a lake. U.S. designs on Russia were afoot well before the Soviets’ hammer and sickle was lowered for the last time on December 25, 1991. It was then that the American “long train of abuses and usurpations” in active pursuit of control over the Eurasian land mass and the earth’s many treasures contained therein enabled what much of the world today sees as not the exceptional (nor indispensable) but the insufferable nation’s dubious triumph. Indeed, we are the Eddie Haskell of nations, sometimes referred to abroad as the “United Snakes.”
The first post-Cold War task the United States pursued was to get her financial artillery inside Russia. George H.W. Bush tapped former New York Fed governor Gerald Corrigan to institute the nonadvertised Bank Forum project, funded through an unannounced U.S. Treasury grant in January 1992. Thus did Yeltsin’s minions begin learning the delicate art of funding the government out of thin air, which in this case required the assistance of billions in IMF loans.
Wall Street, whose bread and butter are bond markets, had been salivating for a Russian sovereign debt market ever since the fall of the Berlin Wall. Corrigan built it, and they came. Corrigan’s product, Russian bonds (GKOs), were the key component in Russia’s second collapse in 1998 and supplied a large pot of money for use in the evolution of the Clintons’ corruption.
George Soros came, too, and his grants to young wannabe traders for study abroad to learn the ins and outs of a modern screen trading suitable for high-powered speculation utterly killed the nascent market that had sprung up spontaneously in Khitai Gorod (“China City”) across the street from the ancient and colorful Chinese tea market. Those early players, who were developing the bonds of trust and faith healthy markets require, were swamped by the Western system’s high-tech bells and whistles, and soon driven into obscurity.
U.S. aid and advice to Yeltsin’s Russia served to create a financially induced genocide as the only growth reported was a rise in death certificates. Funerals became truly communal; the corpses of three grannies shared the costs of their final church service, which no one babushka’s savings could pay. After Jeffrey Sachs convinced Yeltsin and Yegor Gaidar to free prices in January 1992 in what was still a monopolistic economy, the subsequent inflationary inferno, which reached an annual temperature of 2,500 percent, consumed the Russian people’s considerable savings. Succinctly and correctly summing up the Harvard crowd’s privatization program as executed by Anatoly Chubais, Vladimir Zhirinovsky raged to me from our side-by-side perch in the Duma’s visitors’ gallery, “They have relieved the population of all their money, and now they put the whole country up for sale!”
Workers went unpaid for months and, in some cases, years, lost their pensions and healthcare, transport and other infrastructure broke down, the national estate fell to rubble, and whatever was viable was stripped and carried away by scoundrels of all nationalities, most especially theirs and ours.
Yet the West’s key purchase, Boris Yeltsin, reigned unimpeded by cannon, assassin’s bullet, or popular protests. Bill Clinton, having seen to a $500 million loan to get “Ol’ Boris” re-elected in 1996, couldn’t risk losing his semiconscious, easily cajoled, and unwitting partner in NATO enlargement. The Russian people were well and truly left on their own, with no one to champion them. One dispirited Duma deputy remarked with a heavy sigh, “It just seems like nothing we try works.”
A lot has changed in Russia over the years since those hard days. The turning point was unexpected and surprising. It came with the collapse of the Russian bond market in August 1998, which prompted the exit of much of the expat community and U.S. advisors, and marked the last days of Boris Yeltsin. Coincidentally, the rise in the price of oil began then, the treasury started showing positive balances, and in the nick of time a champion arrived, a self-described “perfect product of a Soviet patriotic education,” Vladimir Putin—Boris Yeltsin’s first and last gift to the Russian people.
In small stories, we can learn a lot about someone. After his first G8 meeting, Putin, an accomplished speaker of German, realized his inability to speak English put him and his country at a disadvantage. He couldn’t engage in the other attendees’ repartee, appreciate a casual witticism, or respond naturally to a friendly comment. Upon returning home, the then-50-year-old Russian president began to study English with a tutor for an hour per day. I have never witnessed another public political figure recognize and correct his own deficiencies in order to do his job properly. Undertaking the acquisition of a new language at age 50 reflects the rare determination and a lifetime habit of discipline and self-improvement.
All of which brings me back to what we might expect, should Donald Trump manage against all odds to take the oath of office next January and have the meeting with Vladimir Putin he says he wants. I predict such a meeting would go well, bringing both Russians and Americans positive results, because of one important characteristic the two men share.
Both men are builders. No, Putin is not a billionaire real- estate developer, but he knows full well his mission is to modernize Russia by rebuilding her. And that’s exactly what he’s doing. You might think of him as a man who is building a market economy in one country—a country with long-standing communal traditions that are in no way a consequence of communist ideology.
And Donald Trump? Well, he’s a “flamboyant” guy from Queens who resculpted Manhattan’s cityscape and now wants to “Make America Great Again.”
If Trump is successful in his quest for the U.S. presidency, I hope someone will whisper in his ear a piece of advice from that most remarkable of German chancellors, Otto von Bismarck: “The secret of politics? Make a good treaty with Russia.”
After all, and to borrow a thought from the Donald, what have we got to lose?
Reprinted with the author’s permission.