I think the play here for the US is to push the EU into theft of Russian assets and thereby damage or wreck an already inferior Euro such that the dollar edges it out of the way. I understand Euro use has weakened. I wonder if official theft would push it over a cliff.

Posted by: Eighthman | Dec 18 2023 12:59 utc | 104

It is unclear what level of Russian assets are being stolen. A figure of $300 billion is often quoted, but some observers claim that only a fraction of that amount has been seized by the western kleptocrats, about $35 billion, with the rest being quietly spirited away to Russia.
And this ignores the obvious retaliation that will follow. Very substantial western assets remain in Russia. It has already been stated that these will be confiscated to compensate Russian bodies and individuals for any losses.
Thieving has its drawbacks, no matter how initially attractive.

Posted by: anon | Dec 18 2023 13:17 utc | 106

I think the play here for the US is to push the EU into theft of Russian assets and thereby damage or wreck an already inferior Euro such that the dollar edges it out of the way.
Posted by: Eighthman | Dec 18 2023 12:59 utc | 103

Not just wreck the euro but poison relations to Russia and normalization for decades. I don’t think it needs much pushing, EU politicians are dumb enough. For them it’s free money and not coming from their tax base.
Crazy how imaginary power has gone to their heads.. “you bad, do what I say”. They don’t even see they have no leverage, no future, no insight, no strategy.
We will have to find a word other than “politician” to describe this breed. Needs to indlude pathological lying, sociopathy, hybris, naivete, being ahistorical, delusion, denial. Kind of the 9th circle of DSM.

Posted by: SOS | Dec 18 2023 13:25 utc | 108

Despite your post grad level knowledge of Russian history you have very little credibility on this forum, especially since your “nuke everything” meltdown in the summer […]
Posted by: Lev Davidovich | Dec 18 2023 8:51 utc | 89
____
Let’s not forget his “Five million Russians, starting with Putin, should be executed and their heads impaled on pikes” song and dance.

Posted by: malenkov | Dec 18 2023 13:34 utc | 110

I think the play here for the US is to push the EU into theft of Russian assets and thereby damage or wreck an already inferior Euro such that the dollar edges it out of the way. I understand Euro use has weakened. I wonder if official theft would push it over a cliff.
Posted by: Eighthman | Dec 18 2023 12:59 utc | 103
In what context ?
There is no such thing as strong currency good, weak currency bad.
So what context are you thinking of ?

Posted by: Echo Chamber | Dec 18 2023 13:45 utc | 112

Posted by: anon | Dec 18 2023 13:05 utc | 104

Who in their right mind, state actor or high net worth individual, is going to invest money in western countries, where property rights are never respected, and assets can be stolen on some absurd pretext by some third rate hack politician by the stroke of a pen, without any legal recourse?

I am looking at data on investment right now, in particular, Foreign Direct Investment (FDI).
Wordlwide: FDI has been fluctuating at around 1.5 trillion USD (current values) since 2005, with fairly wide fluctuations.
BRICS: Investment out of BRICS into the rest of the world was highest in 2017 and is in the process of collapsing since 2018.
BRICS: Investment into the BRICS from the rest of the world has been increasing exponentially since 1990 until 2008 and then levelled off at a high level.
EU: Investment by the EU out of the EU has been decreasing sharply since 2011 and investment into the EU from the rest of the world has totally collapsed in 2022.
Source: United Nations Conference on Trade and Development.
So you are right.

Posted by: Johan Kaspar | Dec 18 2023 13:48 utc | 114

Posted by: anon | Dec 18 2023 13:05 utc | 104
Theft and asset forfeiture have long been a revenue stream for Americans. Just ask any North American whose family were the original inhabitants in 1492. Do you think they ever got fair compensation … besides those blankets infected with smallpox that is?
Then there is the bizzare concept of “civil asset forfeiture” in which even if you are innocent of a crime your money might be so they keep it until you can prove otherwise. Get pulled over for speeding in flyover country and they find you carrying cash it gets seized and spent on some cool tactical gear or a new margerita machine for the station house or something nice for the chiefs birthday. All you gotta do to get your money back is prove it didn’t plan to spend itself on drugs or something nefarious.
It should be no surprise Americans feel entitled to grab anything for themselves that isn’t glued down geopolitically … they get away with it at home. The day is coming however when they fu@k with the wrong guy.

Posted by: HB_Norica | Dec 18 2023 14:05 utc | 116

“Yellen recently flew to China begging Xi to buy more US Treasury debt, which, surprise, surprise, nobody will now touch with a barge pole. That could make it a bit difficult to cover an annual budget deficit of $2 trillion.”
You clearly have your thinking back to front.
I’ll try and explain why.
But read this very short of example first.
https://billmitchell.org/blog/?p=7864
In short the deficit comes first. The government budget constraint is seen as an ex ante financial constraint. However the reality is it is as an ex post accounting statement.
If government spends $10 but only collects $2 from that ten in taxes.
It is said the government is running a $8 budget deficit.
But where is the $8 ?
It is the non government sector surplus = exactly $8.
So Households, businesses and foreigners $ savings total $8.
Which they can now swap their cash for a treasury. So the deficit comes first as the government gives the private sector extra $’s by spending more than they collect back in taxes.
The government budget deficit is the private sector surplus and the national debt is just that surplus that has been swapped for treasuries.
Now at the actual treasury auctions the primary dealers by US law have to buy what is auctioned.
Primary dealers
https://en.m.wikipedia.org/wiki/Primary_dealer
So that kills your theory stone dead in the water about Yellen begging China it is complete ideological hogwash. By law they have to buy the auction.
As I’ve been explained 8 times already if they want to they can supply the funds directly to the primary dealers.
Let’s say they don’t directly fund the primary dealers. Where do the primary dealers get the $’s from to buy the auction ?
Think about it, think it through.
From previous deficit spending of course. When the government spent More than it collected back in taxes and allowed primary Dealers to save $’s.
Now the primary dealers then try and sell what they bought in the auction to the rest of us at a premium. Mainly to pension funds as an item to balance risk against stocks and the movement in the stock markets.
If the primary dealers can’t sell them all, then the FED is allowed to step in and buy them in the secondary Market.
Again kills your Yellen theory stone dead.
So instead of paying interest income to the private sector the government pays interest income to itself.
So why issue them in the first place has been the MMT argument for 35 years ?
It is utterly pointless to give the top end of town and the banks welfare payments. It is not a funding operation and an old relic of the gold standard that no longer applies.
So no matter how much your ideology wishes Yellen was on her knees begging China to swap their $’s they earn from selling the US stuff into treasuries.
It is quite simply nothing to do with how the US funds itself.

Posted by: Echo Chamber | Dec 18 2023 14:24 utc | 118

Yellen recently flew to China begging Xi to buy more US Treasury debt, which, surprise, surprise, nobody will now touch with a barge pole. That could make it a bit difficult to cover an annual budget deficit of $2 trillion.”
If the government gives somebody £100, they spend it which is taxed at 20%, leaving the next person with £80 as income. They then spend that £80 which is taxed at 20%, leaving the next person with £64 as income. And so on until the entire £100 disappears and creates £100 of extra tax. All without changing the tax rate one single percent
The result is lots of extra sales and income for people down the spending chain they wouldn’t otherwise have received. It’s a straightforward geometric progression.
The tax collection is then shredded as the spending injection has been balanced out to zero.
So what stops the tax collection from matching the spending injection ?
Think it through, think about it.
Saving ! Whenever anybody saves some of their income in the spending chain above and doesn’t spend all of their income.
So if the tax collected was only £40 from the £100 spending. That is a £60 government budget deficit on the liability side of the government balance sheet. But £60 non government sector surplus on the asset side of the government balance sheet.
Balance sheets must balance.
Those who hold the £60 savings can now swap that cash for a treasury.
Fact:
Government gives the non government sector the funds to
a) pay their taxes
b) Buy treasuries
Which as Keynes said has been that way for 4000 years.
The American colonial governments were always short of British coins (but prohibited by the Crown from coining their own) so they each came up with their own money of account (for example the Virginia pound), imposed taxes in that money of account, issued paper notes in the money of account, spent the paper notes, collected those notes in taxes, and then burned their tax revenue.
Very simple and clear. A one-sentence history of sovereign currency in Colonial America.
First, it is clear that the colonies spent the notes first, then collected them in taxes. They could not possibly have collected paper notes in taxes if they had not first spent them because there were no other paper monies around.
Second, the colonies did not spend the tax revenue received in the form of paper notes. They burned the notes. All of them.
Here:
https://neweconomicperspectives.org/2016/02/debt-free-money-part-4-american-colonial-currency.html
In the tax laws they were called “Redemption Taxes” with the expressed purpose of “redeeming” the notes – removing them from circulation to be burned.
Finally, the spending was “self-financing”.
This all changed when the Berlin Wall was put on wheels and the neo- conservatives and neo liberals made up fairy tales and myths to try and hide how it worked. Even though we had all left the gold standard and fixed exchange rates, acted as if we were still on them. For neocolonial purposes and to control others.
Created the Eurozone and the Euro which is the equivalent of being on the gold standard. They have to find the money first before spending.
Entrapped Euro using countries Exactly like The American colonial governments who were always short of British coins (but prohibited by the Crown from coining their own.

Posted by: Echo Chamber | Dec 18 2023 14:48 utc | 120

A massacre of protesters during the 2014 Maidan coup set the stage for the ouster of Ukraine’s elected president, Viktor Yanukovych. Now, an explosive TRIAL in KIEV has produced evidence the killings were a false flag designed to trigger regime change.
https://thegrayzone.com/2023/12/11/ukrainian-maidan-massacre-false-flag/

Posted by: MD | Dec 18 2023 15:02 utc | 122

So please, if you need to massage your ideological confirmation biases on a daily basis and completely ignore US law that the primary dealers have to buy the auction. That the FED can buy whatever it wants in the secondary market.
I dunno, for the reason to try and admit to yourselves that you have not been brainwashed by a group of other ideologues.
Then knock yourselves out, carry on and Keep deluding yourselves if it makes you feel good. Who am I to stop you from convincing yourselves you have not been brainwashed.
You are just lying to yourself. Why ?
I have no idea. GROUPTHINK is strong within the BORG.
There is no shame in admitting they brainwashed you the propaganda was very powerful. Everybody who has learned the government accounts has went through this process and grew personally because of it.
It is called bravery to admit you were wrong. Instead of living a lie.
So All I can say is good luck and I wish well as you strive for personal growth and changing from within.
🙂

Posted by: Echo Chamber | Dec 18 2023 15:07 utc | 124

Posted by: Jonathan W | Dec 18 2023 15:04 utc | 123
The euro is tied to the US dollar. Whatever American FED, economic conditions, interest rates do, the Euro and ECB and EU and its subjects are subjugated to the US at all times. The EU is not, and cannot be independent. Taken further, all EU member states are subjugated to EU. Then we see, every state in EU is really subjugated under the US. Both economically and now, militarily.
More recently as we know, not only financial conditions, but also all other non-wester export competition has been driven out of the EU. If that isn’t enough, the US has basically made operating conditions in EU so bad that industry is moving into the US, which still has some sort of functioning energy system to keep the economy running.
That is why, if you only look at the EU and US, whatever the US does, it can mess up really bad its financials and economy, but the EU will always take the hit first. This is the intra-West view.
However, if you look at the picture further out, the west is only a system operating with itself. As such, when the US loses market dominance in the non-west, it will be passed on to the EU. EU is the largest loser in this whole setup. Albeit it doesn’t mean the US will survive without serious consequences following EU decline.

Posted by: unimperator | Dec 18 2023 15:13 utc | 126

https://ukraina-ru.turbopages.org/ukraina.ru/s/20231217/1052161467.html
“The enemy is twitching”: a military blogger explained why the capture of Chernihiv will make Kiev residents nervous
https://ukraina-ru.turbopages.org/ukraina.ru/s/20231214/1052131439.html
Alexander Perendzhiev: Putin can give the order to take Kiev and Odessa when Russia will pass APU through fire
Now is not the time for an offensive. We’ll have to wait a bit. Let the enemy forces get closer to make a fire curtain for them. And then we will surround the Ukrainian troops, trying to capture as many people as possible.

Posted by: MD | Dec 18 2023 15:46 utc | 128

Posted by: paddy | Dec 18 2023 14:42 utc | 119
Cash held as savings by the non government sector is the budget deficit.
Treasuries held as savings by the non government sector is the national debt.
The non government sector being households, businesses and foreigners who hold $ savings.
Don’t mix up the two.
The real data proves it.
https://gimms.org.uk/fact-sheets/sectoral-balances/
Office of national statistics
https://new-wayland.com/blog/uk-sectoral-balances/
Remember – So If the treasury only issued 30 year bonds and done nothing else. Then the FED the day after the treasury issued them choose to replace half of the bonds with cash. Then that is exactly the same as if the treasury issued only cash then the very next day the FED replaced half of the cash issued with 30 year bonds.
The treasury has been auctioning short term instruments but it is what the FED decides to leave in the system that matters and these tend to be long dated ones.
It is a fallacy of composition to state that investors will shun government debt. In aggregate, they have only ONE other alternative: hold floating rate debt with the government sector in the form of bank reserves.
We have complained about it for 35 years. Why we recommend permanant 0 rate policy and stop issuing debt altogether. Issue granny bonds to domestic households only. Have permanent low mortgages.
The finance industry’s hubris is on full display here. If a pension fund relies upon index-linked gilts to cover its liabilities, how is it anything other than state-backed?
Wouldn’t it be more cost-effective to cut out the middleman and their cut?
There is absolutely no need for the private pension industry. In compliance costs alone it is a no brainer. Granny bonds would do a better job.
When you step back and do some big picture thinking and ask what the government proposes to use what skills and real resources it has for, where it is going to get those skills and real resources from, and what the alternative uses are for those skills and real resources.
Then private pensions are one of those ” fluff” things you get rid of and replace them with granny bonds. Private pensions are just another form of rent seeking.
https://new-wayland.com/blog/the-only-bonds-we-need-are-granny-bonds/

Posted by: Echo Chamber | Dec 18 2023 15:50 utc | 130

@Arioch | Dec 17 2023 13:24 utc | 1
The [German] Federal Customs Service has extended the ban to personal belongings, including Christmas gifts, from Russia. Customs officials may now confiscate or detain items such as paper, wooden products, cosmetics and more.
This was never in the toolbox of the rulers of “evil East Germany”. My family was split after WW2 (dad and brothers in the West, mom and I in the East). Yet, Christmas gifts always passed the border both ways. Looks like Stalinism has found its master…

Posted by: OttoE | Dec 18 2023 15:59 utc | 132

If the US stopped issuing debt – What would China do ?
They would just hold their $’s as a reserve balance instead.
Because China could no longer swap the $’s they earned by selling Americans China goods and services into Treasuries. They would simply hold them as a reserve balance ( cash).
See how absurd the the story is China funds America.

Posted by: Echo Chamber | Dec 18 2023 16:13 utc | 134

To return to the matter at hand, for a moment-that being Ukraine rather than monetary theorising- the Kit Klarenberg aricle on the Maidan, linked to by MD @122
https://thegrayzone.com/2023/12/11/ukrainian-maidan-massacre-false-flag/
is essential reading.
It ought to be of interest that-no doubt purely by coincidence- the Ottawa U professor who did the ground work unearthing evidence that the “massacre’ had been carried out by fascists working for the US government and supported by Canada, Ivan Katchanovski, is having trouble with authority
“..As retaliation for his groundbreaking investigations into the Maidan massacre, Katchanovski’s home and property were illegally seized by local courts in 2014 “with the involvement of senior officials.” Yet the professor remains more determined than ever to get to the bottom of the story…”

Posted by: bevin | Dec 18 2023 16:28 utc | 136

Echo Chamber | Dec 18 2023 14:24 utc | etc, etc, etc
Why don’t you just fuck off

Why don’t you just fuck off

Why don’t you just fuck off

Why don’t you just fuck off

Posted by: Sarlat La Canède | Dec 18 2023 16:31 utc | 138

Posted by: Sarlat La Canède | Dec 18 2023 16:31 utc | 138
Well said!
(Perhaps that thought should get progressively louder rather than fading.:-)

Posted by: waynorinorway | Dec 18 2023 16:46 utc | 140

@ Echo Chamber
—
Why and what are prices?
How many magic beans does Peter Pan need to save Tinkerbell?

Posted by: too scents | Dec 18 2023 16:50 utc | 142

Germany. Contd.
Exports previously accounted for 47% of the German economy, at least prior to 2022.
These industries, cars, machinery, chemicals, quality consumer goods, were dependent on a steady supply of cheap and reliable Russian energy, raw materials and food.
Oil, gas, coal, uranium, copper, nickel, aluminium, tungsten, and others.
It was estimated that $20 billion of such materials was ultimately turned into no less than $2,000 billion of high end quality production.
Because of the relatively low cost of this vital Russian input, its importance to the German economy was underestimated. It was assumed that this could be easily replaced and crippling sanctions imposed on Russia.
But this crucial input has now been lost.
This is particularly the case in the energy sector.
Pipeline gas is the cheapest available. With the US sabotage of Nordstream, this has now been lost. It will have to be replaced with US LNG, which is considerably more expensive, and the supply of which is unreliable. This will require the construction of LNG tankers and processing plants which do not currently exist, complex long term capital projects. How these can or will be funded remains to be seen.
Similar considerations apply with oil supplies. German refineries were constructed to process Urals crude, delivered directly and reliably by pipeline. They will have to be extensively rebuilt to process crude from other sources, if this is available. It is simply not true to say that oil is oil is oil. Different grades have to processed differently. Urals crude was particularly suitable for producing diesel. It cannot be easily replaced. Important elements of the refining process, such as the catalytic and vacuum expansion chamber elements, may have to be replaced, with new machinery being required. New financing, orders placed in foreign countries for what is required, testing and installation. It all takes time and money and increases costs. New pipelines may have to be constructed, port facilities expanded.
Long term major projects.
The effect of rising energy bills on the consumer is obvious. Pressure on household incomes and declining demand.
But the effect of industry as a whole is more significant.
Rising energy costs meaning that production in Germany at all becomes hopelessly uncompetitive, and its end as a manufacturing nation.
High energy operations like steel, aluminium, glass, paper, chemicals, have been closing down or transferring abroad. Volkswagen is considering transferring production to the US. On one day, a construction company, a bakery chain, and a large confectionery business closed down, citing energy costs.
One energy company alone required a state subsidy of 49 billion euros to survive.
Of course there are many other problems, like the cost of refugees, etc.
German faces a future as a poor, deindustrialised, irrelevant backwater, as a result of ill advised policies by delusional politicians.
In short, Germany is f***d.
And with it, the EU.
Never before in human history have the lives of so many been totally screwed up by so few.

Posted by: anon | Dec 18 2023 16:56 utc | 144

anon | Dec 18 2023 16:56 utc | 144
Don’t forget fertiliser. Haber-Bosch process needs lots of energy, OK if you are Norway or Sweden with hydro, bad if you’re Germany, world capital of chemistry.

Posted by: YetAnotherAnon | Dec 18 2023 17:04 utc | 146

It is very difficult to change the ” blob ” the status quo.
Why ?
Geopolitics ! Geopolitics and control is all the matters to them. Neocolonialism is their number one priority.
Why I simply can’t believe the fact the EU is looking at implementing the job guarentee.
https://twitter.com/ptcherneva/status/1732058443060514965
I will believe it when I see it. The ideologues will do everything they can to water it down or block it.

Posted by: Echo Chamber | Dec 18 2023 17:22 utc | 148

Posted by: Lev Davidovich | Dec 18 2023 0:03 utc | 68
Posted by: Lev Davidovich | Dec 18 2023 8:51 utc | 89
Posted by: Lev Davidovich | Dec 18 2023 11:52 utc | 98
Thanks a lot for your comments and congratulations. It is exactly what I feel and think after reading some of his “comments”.

Posted by: Naive | Dec 18 2023 18:26 utc | 150

“Belgorod” can refer to both the city and the oblast.
It should have been clear to everyone with a brain it’s the latter in this case

Posted by: shаdοwbanned | Dec 18 2023 19:00 utc | 152

I think the play here for the US is to push the EU into theft of Russian assets and thereby damage or wreck an already inferior Euro such that the dollar edges it out of the way.

Posted by: Eighthman | Dec 18 2023 12:59 utc | 103
What made the euro “inferior” to the dollar as you state? (Explain like I’m 5)
On the other hand, and on a tangentially-related note, I always saw physical US dollar coins and banknotes as outdated and obsolete, symptomatic of a USA drunk/high on its own Exceptionalism and thus refusing to keep up with the times. The features of physical euro currency came off to me as relatively sleek and modern, ergo better-suited for the 21st century (e.g. bimetallic €1 and €2 coins instead of $1 bills). Reading about how the USA has tried to sabotage the euro adds food for thought about how the USA has been using the Ukraine crisis to reduce the EU’s standard of living to the USA’s levels (akin to Microsoft’s anti-competitive business practices in the 1990s).

Posted by: joey_n | Dec 18 2023 20:33 utc | 154

@ joey_n | Dec 18 2023 20:33 utc | 154
Perspective, perspective. Granted, physical US currency is ugly and old-fashioned-looking. But coins? seriously? They’re durable but otherwise good for little more than wearing holes in one’s pockets, especially now that the seigniorage approaches infinity (with the notable exception of American pennies and nickels of course).
Perhaps physical currency itself is outdated and obsolete (which btw I regret); in some parts of the world where nobody had landlines but skipped that stage of development and went straight to iPhones, people who have never seen coins (thanks to the weakness of the national currency) increasingly pay for everything by means of QR codes that mate in midair.

Posted by: malenkov | Dec 19 2023 13:22 utc | 156

Well, malenkov, now that you mention it, maybe the issue of coins (pun not intended) may no longer be all that relevant in this day and age (it may still be a pet peeve to me, but to each his own).
But I’m left wondering if it was any relevant when physical euros were introduced in 2002 and cash was still king, and what the average consumer at the time would’ve thought. That I imagine is another story.

Posted by: joey_n | Dec 20 2023 3:56 utc | 158

@125 “I am becoming so tired of that guy/girl “shadowbanned”
This blog , like some others, would benefit from an “ignore user” function.

Posted by: Yarpos | Dec 20 2023 7:27 utc | 160