In last week's News and Views from the Nefarium for April 3, 2014, I outlined recent Russian financial initiatives, including the coming establishment of domestic clearing in Russia free of the dollar, as a step towards a system of international clearing also free of it. For those who have been following this website, I've been arguing for some time that an inevitable consequence of the BRICSA entente would be the establishment of such a system, which appears to be being assembled slowly and with some deliberation, piece by piece, as exampled in various bilateral clearing agreements, the most recent being between Germany and China to clear in reminbi, as I also pointed out on last week's News and Views.
I have also advanced the argument that, historically, reserve currency status has normally accrued to the predominant naval power of an age: Venice, Portugal, Spain, France, Great Britain, and now most recently, the USA. I have also argued that with international clearing increasingly reliant upon electronic transfer, that the naval analogy is now more appropriately to be viewed as rooted in space and control of space communications assets. In this respect, I have argued that this will mean, if any truly independent challenge to US dollar reserve currency is to be mounted, that it will not only involve the establishment of international clearing free of Western-dollar dominated networks, but that it will also inevitably manifest itself in a renewed commitment from the BRICSA nations to expand their space commitments. Until such time as that occurs, the reserve status of the US dollar may be battered and weakened, but it will not go away.
In the wake of the Ukrainian-Crimean crisis, however, which the Western media is still attempting to portray as almost entirely Russia's fault, and in the wake of the "sanctions" imposed on Russia by the Obama Administration, there are some looming problems, as NASA has announced suspension of all cooperation with Russia in space, excepting the International Space Station:
The problem with this latest move is that, like the sanctions, it is largely toothless:
"Just last week, a trio of astronauts, including two Russians and one American, launched into space on a Russian rocket, headed for the International Space Station. Without a shuttle program of its own, NASA depends on Russians to ferry its astronauts to and from the station, and pays them $70.7 million per seat. The U.S. space agency is working with private American companies to develop rockets and break out of Russia's transportation monopoly.
"'NASA is laser-focused on a plan to return human spaceflight launches to American soil, and end our reliance on Russia to get into space,' Wednesday night's statement read. 'This has been a top priority of the Obama Administration's for the past five years, and had our plan been fully funded, we would have returned American human spaceflight launches—and the jobs they support—back to the United States next year.'"
The US maintains, of course, a satellite launch capability, but this capability underscores a weakness, at least, a weakness insofar as publicly acknowledged launch technologies go: since the retirement of the space shuttle, the USA has no ability to launch large cargos or humans into space; Russia, on the other hand, with its Proton and Energia boosters, does. The Ukrainian-Crimean crisis, then, may be conveniently used as a "crisis of opportunity" to beef up the public space program again, or perhaps, even as a means to gradually reveal aspects of the secret space program - including launch technologies - that many, including this author, have suspected has existed for quite some time.
The catch, however, is revealed by the article: NASA has steadily been cut back in its funding, and that's the financial worm on this hook. The US ability to fund such programs, or a re-expansion of NASA, is dependent largely on public funding, and that in turn is dependent on the USA's ability to continue to sell bonds. So here's a high octane speculation and scenario: In last week's News and Views I also outlined how Mr. Putin very cleverly loaned money to the Ukraine by insisting that is (1) sell some $3 billion in sovereign debt instruments - bonds - that were (2) denominated in euros and not dollars, and (3) the bonds would be immediately called in by Mr. Putin if the Ukraine's debt-to-GDP ratio exceeded 60%, a rather ingenious way to impose controls on how much debt-from-thin-air its central banks could create.
The USA, of course, has, according to some estimates, exceeded this ration already.
Which leads to the high octane scenario: what if, as a condition of other nations continuing to by US treasuries, the major buyers of those instruments - Japan, China, Belgium(!) and so on - insisted as a condition, and in parallel and citing recent downgrades of the credit rating of those securities, that a similar ratio of debt-to-GDP would be a condition of their purchase? It would be a rather ingenious way to impose "austerity measures" on the USA and its governmental bodies and financial agencies, and a way of reigning in what many are seeing as an out-of-control American interventionism.
We're a long way off from such an event... or are we? ..because rest assured, if a hack from South Dakota can think of it, they can surely think of it in Beijing, Tokyo, Moscow, and Berlin.
See you on the flip side.
- THE PENTAGRAM FAILS ITS FIRST AUDIT - November 20, 2018
- THE CA FIRES: STRANGENESS SQUARED - November 19, 2018
- TESLA’S WARDENCLYFFE, TEXAS STYLE - November 16, 2018
- NEWS AND VIEWS FROM THE NEFARIUM NOV 15 2018 - November 15, 2018
- AN UPDATE ABOUT THE LATEST CALIFORNIA FIRES - November 15, 2018
- TIDBIT: SATELLITES AND FIRES - November 15, 2018
- LION AIR FLIGHT 610: A BOEING ANNOUNCEMENT AND SOME FINANCIAL ... - November 14, 2018
- FISHY CALIFORNIA FIRES AND OTHER STUFF - November 13, 2018
- WORLD WAR ONE: THE ELEVENTH HOUR OF THE ELEVENTH DAY OF THE ELEVENTH ... - November 12, 2018
- DARK JOURNALIST INTERVIEW HERE - November 11, 2018