Putin Prepares for a Currency War that He Thinks (Hopes?) Will Collapse America

by Kevin D. Freeman on February 11, 2013

173789373Two respected news sites with separate but connected stories outlined the serious trouble we are in (even if they don’t seem to recognize the gravity of their reporting).

First, it is reported on Bloomberg that Russia’s Putin has overseen the largest gold buying of any nation on the planet:

By Scott Rose & Olga Tanas - Feb 10, 2013 2:00 PM CT

When Vladimir Putin says the U.S. is endangering the global economy by abusing its dollar monopoly, he’s not just talking. He’s betting on it.

Not only has Putin made Russia the world’s largest oil producer, he’s also made it the biggest gold buyer. His central bank has added 570 metric tons of the metal in the past decade, a quarter more than runner-up China, according to IMF data compiled by Bloomberg. The added gold is also almost triple the weight of the Statue of Liberty.

Russia’s Prime Minister Vladimir Putin, center, holds a gold bar while visiting the Central Depository of the Bank of Russia. Photographer: Alexsey Druginyn/AFP/Getty Images

“The more gold a country has, the more sovereignty it will have if there’s a cataclysm with the dollar, the euro, the pound or any other reserve currency,” Evgeny Fedorov, a lawmaker for Putin’s United Russia party in the lower house of parliament, said in a telephone interview in Moscow . . . CONTINUE READING AT BLOOMBERG….

Look at the basis for the gold buying as described by Evgeny Fedorov from Putin’s party. It is clear that this is a play to protect against a currency failure. Now, look at this article from CNBC today:

Currency War? Here’s How to Hedge It With Gold

GOLD, METAL COMMODITIES, FUTURES AND COMMODITIES, GOLD OVERVIEW, US DOLLAR CURRENCY INDEX, US DOLLAR / JAPANESE YEN, GOLD / US DOLLAR SPOT, BUSINESS NEWS

CNBC.com | Monday, 11 Feb 2013 | 5:39 AM ET

As leaders from around the world meet this week to discuss fears of competitive currency devaluations, analysts told CNBC the currency war could lead to a sharp rise in gold prices in the second half of this year, after a falloff in the first half.

“We think a currency war will be the biggest story of 2013 when we look back on the year,” Patrick Armstrong, managing partner at Armstrong Investment told CNBC on Monday.

Currency devaluations will be on the agenda as the Eurogroup of finance ministers meets on Monday. France said it would raise the issue of the strengthening euro at the meeting, and again on Friday when the G20 finance ministers meet in Russia. . . CONTINUE READING AT CNBC….

These two articles are saying virtually the same thing. They both say that a mistrust of paper currencies is a good reason to own gold. The difference, however, is that the Bloomberg article identifies Putin as the biggest gold buyer. This would indicate that he is rational given the currency climate. It becomes far more serious, however, when you add to that the fact that he would like to see the dollar collapse as explained in these previous posts:

Putin Wants Russia and China to Join Forces Against the West

Is The Dollar Our Greatest Vulnerability?

BRICS Call For Dollar’s Demise

Why is Hugo Chavez Taking His Money Out?

We might take this issue less seriously if not for the fact that Putin’s Russia allegedly called for a dumping of U.S. bond holdings at the height of the crisis in 2008 according to Hank Paulson, former Secretary of the Treasury:

Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds

By Michael McKee and Alex Nicholson – January 29, 2010 05:32 EST

Jan. 29 (Bloomberg) — Russia urged China to dump its Fannie Mae and Freddie Mac bonds in 2008 in a bid to force a bailout of the largest U.S. mortgage-finance companies, former Treasury Secretary Henry Paulson said.

Paulson learned of the “disruptive scheme” while attending the Beijing Summer Olympics, according to his memoir, “On The Brink.”

The Russians made a “top-level approach” to the Chinese “that together they might sell big chunks of their GSE holdings to force the U.S. to use its emergency authorities to prop up these companies,” Paulson said, referring to the acronym for government sponsored entities. The Chinese declined, he said. Russia’s five-day war with U.S. ally Georgia started on Aug. 8, the same day as the opening ceremonies of the Beijing Games. Prime Minister Vladimir Putin told U.S. President George W. Bush during those ceremonies that “war has started,” according to Dmitry Peskov, Putin’s spokesman.

“The report was deeply troubling — heavy selling could create a sudden loss of confidence in the GSEs and shake the capital markets,” Paulson wrote. “I waited till I was back home and in a secure environment to inform the president.” …..CONTINUE READING AT BLOOMBERG ….

Now, add to this the fact that Putin’s favorite professor Panarin has long predicted a collapse of the dollar that would destroy the American empire:

By ANDREW OSBORN  December 29, 2008

MOSCOW — For a decade, Russian academic Igor Panarin has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument — that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S. — very seriously. Now he’s found an eager audience: Russian state media.

[Prof. Panarin]IGOR PANARIN

In recent weeks, he’s been interviewed as much as twice a day about his predictions. “It’s a record,” says Prof. Panarin. “But I think the attention is going to grow even stronger.”

Prof. Panarin, 50 years old, is not a fringe figure. A former KGB analyst, he is dean of the Russian Foreign Ministry’s academy for future diplomats. He is invited to Kremlin receptions, lectures students, publishes books, and appears in the media as an expert on U.S.-Russia relations.

But it’s his bleak forecast for the U.S. that is music to the ears of the Kremlin, which in recent years has blamed Washington for everything from instability in the Middle East to the global financial crisis. Mr. Panarin’s views also fit neatly with the Kremlin’s narrative that Russia is returning to its rightful place on the world stage after the weakness of the 1990s, when many feared that the country would go economically and politically bankrupt and break into separate territories. …CONTINUE READING AT THE WALL STREET JOURNAL ….

As you read the article, you will see that Panarin predicted that the U.S. “pyramid scheme” of debt would collapse in 1998 “and predicted China and Russia would usurp Washington’s role as a global financial regulator.” Funny thing, however, is that our debt was quite manageable in 1998. In fact, we were running an annual surplus and leading economists even predicted in the year 2000 that we would have all our debt paid off by 2012. So, how was Panarin able to predict a collapse by 2010 instead? Here is the answer from The Wall Street Journal:

He based the forecast on classified data supplied to him by FAPSI analysts, he says. He predicts that economic, financial and demographic trends will provoke a political and social crisis in the U.S. When the going gets tough, he says, wealthier states will withhold funds from the federal government and effectively secede from the union. Social unrest up to and including a civil war will follow. The U.S. will then split along ethnic lines, and foreign powers will move in.

P1-AO116_RUSPRO_NS_20081228191715Hate to say it but it seems like Panarin’s view of what would happen is much closer than the brilliant American economists who predicted we would pay off all our debt. This, of course, raises other questions about what Panarin and Russian Intelligence may have known that we didn’t. Is it possible that something was happening that didn’t show up in economic modeling? Of course it is. We are in the midst of a global economic war which escalated dramatically with the 9/11 attacks. That is the essential thesis of our book Secret Weapon. And, it is well supported by both KGB and PLA Doctrine as explained in the following articles by leading experts:

Confirmation of “The Sequence”

Review of Secret Weapon from a European View

This is a War to Destroy America; Here’s What You Can Do

The conclusion is obvious. We are in the midst of a global economic war although only a few recognize it. Putin understands this and has been preparing Russia for it. Are you prepared? Read Secret Weapon and watch this Blog for continuing updates (put your email address in the subscribe box to automatically receive these updates).

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