Russia needs to break the economic stranglehold of the collective West

Archival data shows that the West's sanctions policy towards Russia, only officially registered, has been going on for almost 900 years. The first mention of an embargo of the Hanseatic League (union of North German cities) against Novgorod dates back to 1137.

For some reason, the Hanseatic League stopped selling wheat to Novgorod. Novgorodians in response stopped selling wax and wood to the Hanseatic League. But, as it turned out later, bread was needed more, and the Novgorodians backed down. A very remarkable case. It will still be useful.

While it was about the exchange of goods. Here is one example of how sanctions were imposed on the service sector. Time – the reign of Ivan IV Vasilyevich in Russia (Ivan the Terrible, Sovereign and Grand Duke of Moscow and All Russia (1533-1547), Sovereign, Tsar and Grand Duke of All Russia in 1547-1584).

The archive of the city of Lübeck (at that time the actual centre of the Hanseatic League already mentioned, now a city in northern Germany, Schleswig-Holstein) contains a letter from the magistrate (city administration) of the city of Reval (now Tallinn, Republic of Estonia) with the date July 19, 1548. The letter contains a request not to let the Saxon merchant Hans Schlitte, who gathered a group of 123 artisans in Europe, enter Moscow. The main idea broadcast from Reval - Moscovia must not get new knowledge and technologies.

Centuries have passed. Nothing has changed. During the difficult time of the Soviet state's formation, Western "partners" imposed unprofitable contracts on us. At the same time, they were well aware that Russia, due to the lack of critical materials and products for development, would be forced to agree to the conditions set. Therefore, it will still pay the invoice that will be issued to it.

Thus, artificially inflating the cost of goods and services made it possible to get superprofits. Who among the capitalists will refuse to do this? Let's mark this as an example of imperfect competition.

The current sanctions policy of the West is also implemented exclusively for the implementation of the goals of exorbitant (Western) enrichment.

As we can see, nothing, absolutely nothing, has changed over time. There are memories, for example, of German businessmen, about the attempts of immigrants from the Soviet party nomenclature to establish business with foreign countries. They still remember – outside the meeting rooms, we openly laughed at the Russian incompetents and sold them, again, unprofitable contracts. This refers to the time after the collapse of the USSR.

It would seem that 30 years have passed and we had a lot to learn. But no such luck. We continue to be "bent over" in the economic sense of this quoted phrase.

Since the beginning of Russia's recognition of the independence of the DPR and LPR (February 21, 2022), we have been hit with economic sanctions. They are, however, closely linked to politics. The first sanctions were imposed by the United States on February 21, 2022. The US was followed by other countries.

In the "Joint Statement on Further Restrictive Economic Measures" of February 26, 2022, the leaders of the European Commission, France, Germany, Italy, the United Kingdom, Canada and the United States announced economic measures directed against Russia. The meeting was held in Washington.

They decided to "hold Russia accountable and collectively ensure that this war is a strategic failure for Putin”. In addition, these individuals, together with their "allies and partners around the world, imposed tough measures against key Russian institutions and banks, as well as the architects of this war. Including Russian President Vladimir Putin”.

It was determined that Russia would be imposed with costs "that further isolate Russia from the international financial system and 'their' economies”. In particular: "excluding certain Russian banks from the SWIFT messaging system in order to disconnect these banks from the international financial system and damage their ability to operate on a global scale; introduce restrictive measures that will prevent the Central Bank of the Russian Federation from using international reserves in such a way as to undermine the impact of our sanctions."

From the very beginning of our special military operation, economic sanctions took the form of an avalanche.

On March 13, 2022, Russian Finance Minister Anton Siluanov officially announced the consequences of the West's subversive activities. He said that out of our total international reserves (approximately $640 billion), $300 billion has been blocked. The National Welfare Fund was also frozen.

What are international reserves, where did the term "freeze" come from, and what does it all mean? In order.

1) International reserves of Russia.

Sometimes these assets are also called gold and foreign exchange reserves. The Bank of Russia (also known as the Central Bank of Russia) reports data on its assets once a year. The previous report was June 30, 2021. Here's what was shown there (in US dollars, blast it):

- 311 billion – securities of foreign issuers;

- 152 billion – cash on deposits in other countries;

- 132 billion – gold located on the territory of Russia;

- 30 billion – foreign exchange reserves in the International Monetary Fund and special drawing rights (SDRs, the IMF's unit of account). About SDRs, they say that they do not exist, and if they do, then the very minimum.

2) "Freeze". Economic dictionaries interpret "frozen assets" as "assets that for one reason or another cannot be used or sold". Now this terminology has come down to us.

By the time the special military operation began (February 24, 2022), the total amount of the Bank of Russia's international reserves was $630-640 billion, compared to $607 billion on April 22. As Russian Finance Minister Anton Siluanov said on March 13, 2022, due to Western sanctions, Russia lost access to almost half of its reserves – $ 300 billion.

There is another message from the Central Bank of the Russian Federation: as of June 30, 2021, 16.4% of the Central Bank's reserves, or $96 billion, were in dollar assets, the equivalent of 189 billion in euros, and 38 billion in British pounds. If to add it up, we get 323 billion. Very similar to Siluanov's assessment.

There is a certain peculiarity – not all dollar assets were in the jurisdiction of the United States. Only 6.6%, or 38.6 billion rubles. Nevertheless, the United States "managed" to freeze (in the Federal Reserve's accounts) about 100 billion. I wonder where they got these billions from?

The question was unanswered at first. Then an answer was found. According to the Candidate of Economic Sciences and Professor of the Russian Academy of National Economy and Public Administration Yury Yudenkov, “in the technology of accounting and control of funds, there is an international agreement: non-cash money... it is stored in the correspondent accounts of those banks that issue this currency. The yen is held in Japan, the pound sterling in the Bank of England, and the dollar in the US Federal Reserve." The issue is closed. Minus $100 billion.

It turns out that the remaining 200 billion now lies in the central banks of unfriendly countries that have their own currency. These are the Reserve Bank of Australia, the Bank of England, the Bank of Canada, the ECB, the Reserve Bank of New Zealand, the Swiss National Bank, the Bank of Japan, the banks of the Bahamas, Norway, Singapore, Taiwan, Montenegro, and South Korea.

It’s also possible to estimate who else, in addition to banks, took away, how much and from whom. “From whom" now needs to be understood as any organisations, including sports, corporations, enterprises, legal entities and individuals, their family members, etc.

What/who else can be hidden under "etc"? For example, goods (raw materials) and services, aircraft-helicopters, ships and trains, cars, movable and immovable property. They managed to drive cultural figures, students, literary works, our cats and even one tree under sanctions. I wonder if they will think of sanctioning space objects, the same ISS?

There is more specific information about the withdrawal of money and other assets. It is estimated that they are not complete.

In March 2022, France froze the assets of the Central Bank of the Russian Federation for €22 billion (French Minister of Economy and Finance Bruno Le Maire). Individuals lost €150 million in money and about half a billion euros in property. Italy has stripped the assets of "private owners” (oligarchs) from the EU lists for €880 million. There is only one arrested “Sailing Yacht” worth €530 million. Dutch financiers first froze 200 million assets, then dispersed and seized assets for 632 million, and blocked operations for another €274 million. It total about €900 million.

In early April 2022, the European Union reported on the freezing of assets of Russian citizens in the amount of €30 billion. Switzerland, which is not part of the EU, blocked assets worth 7.5 billion Swiss francs (more than $8 billion).

It should be noted that there is almost no data on the number of frozen assets on foreign currency deposits of corporations, companies and other organisations. Perhaps we can talk about the amount of $300 billion, if not more.

What are these attacks based on and why do they still work?

The reason is that we kept money and other assets in foreign territories and under foreign jurisdictions. As it turned out, our opponents took advantage of this in difficult times. And, as expected, it will be used in the future. The money/asset withdrawal system will continue to work.

To the same assets, it’s possible to safely add state property located abroad. We have already been robbed of the facilities of the Russian diplomatic missions in the United States. It was December 2016. Almost all the objects belonged to Russia. But, apparently, it didn't reach us back then. But now, probably, it has reached. It’s impossible to trust them.

Russian President Vladimir Putin quite correctly stated that the West "drew a line under the reliability of its currencies... and now everyone in the world knows that obligations in dollars and euros may not be fulfilled”.

There is one interesting point in the history of sanctions. This is the story of "sanctioned" cats. The international cat federation “Federation Internationale Feline” (FIFe) from March 1 to May 31, 2022 banned the participation of Russian cats in exhibitions abroad. Registration of pedigreed cats in the FIFe pedigree books was banned. FIFe, in turn, is one of the nine members of the World Cat Congress (WCC).

It turns out that some people have staked out some claim to leadership in the "cat" field. They made offices for themselves, formed pedigrees, drew diplomas, cut out seals. After that, they said - we are in charge here. The rest of you must follow our rules. Those who do not comply are not with us, and they will receive neither money nor recognition.

Some kind of self-seizure of territory followed by self-crowning. For sure, all mass events of these organisations are well paid by the participants of contests, competitions and sales themselves. The cat owner's interest is collected regularly. Plus income from the sale of books, manuals, and accessories. One can live and not grieve.

The same inflating of cheeks is observed on the stock, commodity and currency exchanges of the world. There are specialised exchanges for grain, cotton, and metals. There is even a nuclear and radioactive materials exchange (UxC, Atlanta, Georgia, USA).

If you are critical of exchanges as intermediaries in "buy-sell-get a percentage of the transaction" operations, you will notice the following: there, smart people sell and buy what they don't produce or own. Sometimes they buy first and then resell. The law is the same - you need to buy cheap, sell expensive.

For example, the London Metal Exchange (LME) trades lead, aluminium, zinc, copper, nickel and tin. What do you think the British produce in large quantities? The answer is nothing.

However, there is a similar story. It's about "English" tea. According to media reports, the first batch of tea for national consumption, grown in England, was received only by 2012 by tea enthusiasts and weighed about 10 tons. Up to this point, it was not grown there. But the whole world has been flooded with expensive packages of "that very English tea" grown in completely different countries for hundreds of years.

In general, this is a typical parasitism of a fraudulent system of exploiting someone else's and very inexpensive labour. The main thing here is to promote the product and stick a branded label. However, the LME has warehouses where metals are available, but many speculative transactions are carried out without the physical supply of raw materials. This is the so-called price difference game. Or playing on other people's nerves.

Another feature, perhaps the most interesting, is that the exchange determines (forms) world prices. The official price of the day, for example, is set by members of the exchange committee.

The fact that exchange prices are affected by various factors has long been known. But these factors do not always have a natural, for example, natural origin. Often they come from the evil one by provoking certain "movements" of the market by interested individuals. There are many legal cases of fraud in this area that have just reached the general public. Some cases are simply hushed up or buried via big money even at the stage of initiation or investigation. As they say, the parties come to an agreement.

Such a long, sort of, digression. But not all nails can be driven in with one blow.

In the case of exchanges, it turns out like with cats. The people have staked out the right to trade other people's goods, legalised this approach with quasi-legal actions, and sell other people's resources to anyone who wants to. At the same time, one gets one’s slice, sitting only at the computer table.

The organisers and executors of exchange operations openly parasitise industrial (capitalism) production and agriculture on a global scale.

The same parasitism is characteristic of financial capitalism. It's even easier here. If the goods, after all, need to be delivered from the seller to the buyer in the end, then in financial matters it is sometimes enough just to control your own finger near the “Enter" button. Here, the product is just a set of electrical impulses, "1s" and "0s" in the corresponding sequence.

The one with the finger also gets a percentage. Convert dollar to yen - get your own. For example, the PayPal payment system charges exactly 10% of the original amount for sending money from country to country with conversion. And after all, nothing can oppose it. They have such draconian conditions. Of course, you can use a different system. If, for example, the correspondent on the other side agrees. And if you don't, there's nothing you can do about it. You'll have to pay.

Another observation. In the first days of the escalation of the military-political situation in Ukraine, the shares of many Russian companies offered for trading on stock exchanges almost instantly devalued. Common sense suggests that this is wrong. People continued to work, products were produced, the demand for them was not canceled, the equipment remained in good condition. What is the reason why prices fell to zero?

So, what happens? A decent share of our assets are blocked. In some cases, production facilities and products are devalued. This is not a market relationship. These are economic sabotage.

Hence the conclusions. The Russian leadership should act more aggressively. The first step to transfer gas payments to the ruble zone is good. We need to push the situation to its logical conclusion. Transactions and currency conversions must start and end on our territory. This is not a mandatory condition yet. Mandatory condition – after the end of conversions and transfers of funds, they should become only rubles, which will ensure control of these funds by the issuer, that is, Russia. This is the most reliable way to protect (save) our money from enemy influence.

This is exactly the scheme established by the Russian Government to pay for the supply of natural (pipeline) Russian gas to European unfriendly countries. However, they resist as much as they can, trying to refuse such a payment. Their concerns are understandable. No matter how hard they try to bring down the ruble, they do not succeed. Even at the stage of reasoning "partners", when no serious decisions were made about payment, the ruble began to strengthen – its rate rose to the level of February-March 2020.

From the point of view of purchasing goods by import, this is very good for the Russian consumer. Goods from abroad will become cheaper in rubles. More recently, the American President Biden rejoiced, even then making a big mistake, that in Russia "a dollar equals 200". It turned out that being in reality is not his strong suit. This reality is completely different. Now they give less than 70 rubles for a dollar, and in the future they will give even less.

Only the strengthening of the ruble is not everything. This may be followed by: the refusal of other countries, for example, from mutual settlements in dollars and euros and the transition to national or other currencies; the fall in the dollar exchange rate against other currencies; the decline in the euro exchange rate, which is already noticeable to the naked eye; the growth of commodity currencies by analogy with the ruble; the transition of the US national debt (more than 30 trillion, about one-quarter of the world's GDP per year) of the critical point where the government will not be able to service it; other troubles that you can think of.

Right now, our leaders of various levels need to show their best strong-willed and fighting qualities when it comes to paying for exports in rubles. The enemy will necessarily blur the created system by all available means. It, for example, is already doing this, refusing to buy gas for rubles. There should be no concessions here. As is said, an eye for an eye.

In the future, the purchase and sale of all Russian goods/resources should be carried out on our territory. There is no need to transfer authority to foreigners. From them follow only problems. Stop putting a wolf pack to guard the sheep herd. Or, similarly, trust goats with cabbage.

At the same time, there is common sense in excluding exchange trading from the number of significant goods and services involved in ensuring the purchase and sale of significant goods and services. As practice shows, even a well-built scheme will fail sooner or later.

There will always be a participant or group of people who plan something bad and then implement their plan. Moreover, most of the ideas are not born on our side. The consequence is another “taking away" of funds to a foreign land. In order to avoid blunders, it is necessary to exclude dealers and brokers from trading, especially with strange places of registration, such as the Cayman Islands, which are generally inaccessible to state control of offshore zones.

The question is, who should trade then? Let the state buy and sell. A return to socialism? Socialism with a soulful approach is not such a bad concept. It is particularly effective in war situations. It doesn't matter that war has not been declared de jure. It happens de facto.

Now it makes sense to tighten the state's influence on the economy. If anyone else remembers – in the First World War, Russian "businessmen" did not fulfil the state order for the production of goods necessary for wartime, including weapons and food. As it seems, they didn't really want to. Back then there were also specialists in budget embezzlement. Because of this, the first requisitioning of farm produce was started back in 1916, that is, even under the tsar-father. It's good when you have something to remember and attach to the case.

Yes, it can be objected: do we have state-owned trade? Why objected? This trade must be organised.

Again, the question is what to do with the current businessmen-oligarchs? Slightly dispossess for the right cause. According to the materials of the Russian division of Forbes magazine for 2021, the first 16 people from the list have personal fortunes equivalent to assets "squeezed" by the West from the Central Bank of the Russian Federation, that is, 300 billion in US dollars. The first hundred owns almost 600 billion rubles. Just as much as all our international reserves, which the authorities have been collecting all over the country for decades, are worth.

Now we can ask the question: how correct and democratic will this be? Everything will be right and in the spirit of democracy. It is enough to mention a few facts. Firstly – in Russia, human labour still costs a penny.

Secondly - the current riches went to their owners for pennies. From the top 16 from Forbes, 14 are owners of businesses related to the exploitation of the contents of our subsurface resources. There, only P. Durov with his Telegram and the owner of Wildberry T. Bakalchuk fall under the exception from the category.

Is it really for pennies? There are doubts? Here is what Chubais once stated: "... we were not engaged in collecting money, but in destroying communism. These are different tasks with different prices... We knew that every factory sold was a nail in the lid of communism. Expensive, cheap, free, with a surcharge – the twentieth question... Privatisation in Russia before '97 was not an economic process at all..."

The fact that the material resources accumulated by generations of people were "sold off" on the cheap should not cause any doubts. Someone else needs something explained and proven? Then the money received for a penny was actively embezzled by bandit groups.

Here are some dry statistics for destroying the benevolent aura woven from dreams of the benefits of capitalism. About 50 people were killed for possession of objects in the area of the St. Petersburg seaport. Well, is capitalism good?

Again, a small digression about the "charms" of capitalism. It somehow works under perfectly favourable external and internal conditions. As soon as something happens that deviates from a positive attitude, problems begin. They can be demonstrated at the simplest, everyday level.

For example, the flood in the Krasnodar Territory in 2012. When they talked about the events in Krymsk, they said: they manage to sell a loaf of bread for 100 rubles. Not all of them, but some of them. Seemingly, they stopped to do it.

From 2020: after idiotic reports that lemons save from coronavirus, they sharply rose in price from 100 to 400 rubles per kilogram. It wasn’t for long, but it still happened.

During the "Direct Line with Vladimir Putin" on June 30, 2021, one girl, hiding from the store staff, broadcast a video with vegetable prices to the studio. The message was quite clear - the prices were incredibly high.

At the same time, the government of the Russian Federation stopped the increase in prices for sunflower oil, bread, sugar and other “essential" products. These are all products made from Russian raw materials. What else does the domestic business lack?

Now, of course, the situation is more tense. The government once again regulates the market, now, it seems, around the clock. And still, again someone manages to sell sunflower oil for 300 rubles per litre, and sugar for 100 or more rubles per kilogram.

These are everyday events. This is what is happening at the state level. On April 26, 2022, Prosecutor General of the Russian Federation Igor Krasnov reported to the Federation Council on the state of law and order in the country in 2021. He spoke about the problems caused by human greed: unjustified increase in prices for medicines due to cartel agreements and unfair procurement activities; unauthorised setting of prices in the housing and communal services system; violations of the law in the defence industry, including in pricing issues; corruption offences that are detected, in particular, when checking the expenses of officials.

Corruption crimes that are suppressed are sometimes committed in organised forms, such as kickbacks, embezzlement of budget funds, and misuse of state and municipal property. Criminals pose threats to the implementation of national and infrastructure projects, state contracts, municipal and public procurement.

The state is losing "strategic and systemically important enterprises and other important assets”. As an example, the return to the state of a controlling stake in the Bashkir Soda Company, "privatised without the consent of the authorised federal body", the return of about 450 hectares of forests and land in the ecological zone of Lake Baikal and the Black Sea coastal strip, necessary for the development of the federal territory "Sirius", was cited.

Enforcement of the ban on the export of timber products to unfriendly countries requires increased control. Non-payment of wages to employees requires increased control. Compliance with occupational safety and health regulations in production facilities requires increased control. The Prosecutor General was always talking about this.

So, everything around requires increased control. Without this boost, everything is plundered and destroyed.

Another conclusion: reducing the level of control by the state will bring such a state to the end of its tether. Therefore, control should be strengthened.

In principle, even without official assessments and statements, it is clear that in some areas we are desperately losing. Weakened forest protection - got a lot of fires. They gave up control of the fishing industry - they got the price of fish on a par with beef, and in addition a few fish billionaires. They turned away, opened their mouths, and lost their microelectronics. Now we will stand in line for "wooden" chips for the automotive industry with an outstretched hand abroad. And now, because of the sanctions, no one will sell us anything. Moreover, they had their own problems with production.

Of course, this is a pessimistic description of reality. But here, if you do not exert oneself in time, then everything will roll downhill.

Be sure to take into account this circumstance. Whatever one may say, Russia constantly lives in conditions of negative external influence. In this state of affairs, does it make sense to rely on "good" neighbours, a "free" market, and further reduce state control over important economic processes? It seems that such a liberal approach will lead us to the edge of the abyss. Therefore, before the wheels fall off, the nuts must be tightened.

Perhaps, having considered it, our leadership will generally reconsider approaches to strategic planning of the country's activities. Maybe it will develop and implement a system like “Gosplan”, remember the calculations of the inter-industry balance?

If you recall the story about Novgorodians, bread and the Hanseatic League, then here's how I want to summarise – all assets from different bins should be returned to their Motherland and trade should be done with foreigners only from our land, if necessary dictating our own conditions. There is reason to believe that without bread and cheap energy, they will not last long and will accept our conditions.