Dollar Collapse

Financial Neutron Bomb Against Russia Latest US Lunacy

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The stupid rush to a war of some sort against Russia never stops with the latest bit of exceptional arrogance directed at taking down Russia’s leader Vladimir Putin being the most dangerous one yet. In a horrifying recent article written by Ambrose Evans-Pritchard at The Telegraph a new kind of weapon of mass destruction, one designed to bring down the Russian financial system not only exists but is being given serious consideration by our idiotic and short-sighted US cadre of political and bureaucratic lunatics running the big red, white and blue asylum.

The article describes a secret financial aspect to that most anti-American of laws that is the USAPATRIOT Act that has been polished by an “elite cell” at the US Treasury Department in what is tabbed as the “Manhattan Project of the 21st Century” in which “scarlet letters” can be applied to foreign banks deemed by the standard loose definitions to have been involved in money laundering to support terrorist activities. In terms of sheer hypocrisy alone when considering the to this day unpunished crime spree of domestic economic terrorism directed at millions of Americans by the big Wall Street banks/casinos with their own money laundering schemes – cleaned up and called derivatives – this has to be the proverbial mother of all bad ideas.

I excerpt from the Telegraph article, entitled “US financial showdown with Russia is more dangerous than it looks, for both sides” from which I excerpt:

The United States has constructed a financial neutron bomb. For the past 12 years an elite cell at the US Treasury has been sharpening the tools of economic warfare, designing ways to bring almost any country to its knees without firing a shot.

The strategy relies on hegemonic control over the global banking system, buttressed by a network of allies and the reluctant acquiescence of neutral states. Let us call this the Manhattan Project of the early 21st century.

“It is a new kind of war, like a creeping financial insurgency, intended to constrict our enemies’ financial lifeblood, unprecedented in its reach and effectiveness,” says Juan Zarate, the Treasury and White House official who helped spearhead policy after 9/11.

“The new geo-economic game may be more efficient and subtle than past geopolitical competitions, but it is no less ruthless and destructive,” he writes in his book Treasury’s War: the Unleashing of a New Era of Financial Warfare.

Bear this in mind as Washington tightens the noose on Vladimir Putin’s Russia, slowly shutting off market access for Russian banks, companies and state bodies with $714bn of dollar debt (Sberbank data).

The stealth weapon is a “scarlet letter”, devised under Section 311 of the US Patriot Act. Once a bank is tainted in this way – accused of money-laundering or underwriting terrorist activities, a suitably loose offence – it becomes radioactive, caught in the “boa constrictor’s lethal embrace”, as Mr Zarate puts it.

This can be a death sentence even if the lender has no operations in the US. European banks do not dare to defy US regulators. They sever all dealings with the victim.

That the US government, particularly the US Treasury which is nothing but a revolving door that spins like wind turbine for the likes of the corrupt elite of the New York based high finance jackals such as former Goldman Sachs CEO Henry Paulson who engineered the disastrous financial bailout and former NY FED boss Timothy Geithner whose phony stress tests allowed the Wall Street casinos to become bigger and more immune from accountability is even contemplating such a serious provocation, a virtual declaration of war against a nuclear power is indicative of the rot and how deep it goes. The best thing that any emerging power, particularly Russia, China or India can do is to get out of the US based financial and banking system entirely.

Back to the Telegraph article:

The US Treasury faces a more formidable prey with Russia, the world’s biggest producer of energy with a $2 trillion economy, superb scientists and a first-strike nuclear arsenal. It is also tightly linked to the German and east European economies. The US risks endangering its own alliance system if it runs roughshod over friends. It is in much the same situation as Britain in the mid-19th century when it enforced naval supremacy, boarding alleged slave ships anywhere in the world, under any flag, ruffling everybody’s feathers.

President Putin knows exactly what the US can do with its financial weapons. Russia was brought into the loop when the two countries were for a while “allies” in the fight against Jihadi terrorism. Mr Putin appointed loyalist Viktor Zubkov – later prime minister – to handle dealings with the US Treasury.

 Mr Zarate said the Obama White House has waited too long to strike in earnest, clinging to the hope that Putin would stop short of tearing up the global rule book. “They should take the gloves off. The longer the wait, the more maximalist they may have to be,” he said.

 This would be a calibrated escalation, issuing the scarlet letter to Russian banks that help Syria’s regime.

He thinks it may already too late to stop Eastern Ukraine spinning out of control, but not too late to inflict a high cost. “If the US Treasury says three Russian banks are “primary money-laundering concerns”, do you think that UBS, or Standard Chartered will have anything to do with them?”

The Ukraine disaster has now taken a turn for the worst with the installation of the new US puppet over the weekend in what amounts to a rigged election.  Petro Poroshenko aka “The Chocolate King” is another sleazy corrupt oligarch who like a depraved dog is already licking Uncle Scam’s balls with an escalation of the “anti-terrorist” actions – in layman’s terms – slaughter of anti-fascist, anti-austerity Ukranians in the east, particularly in Donetsk where Zarate’s “high cost” is being inflicted on civilians who reject the Kiev coup government and it’s neo-Nazis. With the new false legitimacy of the “Chocolate King” trumpeted by the corrupt US state-corporate media the real bloodshed is about to begin.

The threat by Zarate to use the USAPATRIOT Act provisions against Russian banks  for being “primary money-laundering concerns” over the laughable charge of backing terrorists in Syria would represent an escalation of extreme danger in that it could implode the entire global economy given the degree of interconnection that currently exists. This would amount to a self-inflicted wound of the gravest nature simply for the childish reason of sticking it to Putin. Granted Zarate has a new book to hustle but considering events over the last year from our political class – including President Barack Obama and John Kerry’s State Department bringing down the entire economic house of cards is entirely probable. Zarate also wrote a column at the neocon propaganda beacon that is the Washington Post back in March in which he called for the US Treasury to attack the Russian banking system.

Once again returning to the Telegraph article Russia would surely retaliate for such an unprecedented and arrogantly conceived act of aggression:

Yet as the old proverb goes: “Russia is never as strong as she looks; Russia is never as weak as she looks.”

Princeton professor Harold James sees echoes of events before the First World War when Britain and France imagined they could use financial warfare to check German power.

He says the world’s interlocking nexus means this cannot be contained. Sanctions risk setting off a chain-reaction to match the 2008 shock. “Lehman was a small institution compared with the Austrian, French and German banks that have become highly exposed to Russia’s financial system. A Russian asset freeze could be catastrophic for European – indeed, global – financial markets,” he wrote on Project Syndicate.

Chancellor George Osborne must have been let into the secret of US plans by now. Perhaps that is why he issued last week’s alert in Washington, warning City bankers to prepare for a sanctions fall-out. The City is precious, he said, “but that doesn’t mean its interests will come above the national security interests of our country”.

The greatest risk is surely an “asymmetric” riposte by the Kremlin. Russia’s cyber-warfare experts are among the best, and they had their own trial run on Estonia in 2007. A cyber shutdown of an Illinois water system was tracked to Russian sources in 2011. We don’t know whether US Homeland Security can counter a full-blown “denial-of-service” attack on electricity grids, water systems, air traffic control, or indeed the New York Stock Exchange, and nor does Washington.

“If we were in a cyberwar today, the US would lose. We’re simply the most dependent and most vulnerable,” said US spy chief Mike McConnell in 2010.

That the US would “lose” a cyberwar is a given in considering the pathology of the personality types tasked with the defense against such. Look at the NSA Stasi that is so intent on building a surveillance machine to turn against any potential US political dissent, commit acts of industrial espionage and blackmail that too little time is likely invested by the hotshots at Ft. Meade to actually consider protecting The Homeland in the event of such an attack. Russia would be entirely justified to launch one too if the US Treasury “elite cell” succeeds in getting Obama to issue the order against Putin’s banks.

An economic collapse would be the best scenario in that case, if the crazies in Washington actually are able to use such tactics to topple Putin and if hard liners end up in charge of Russia’s nukes then it could be hasta la vista baby.

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