False Flags & WarSecrets & Leaks

How Close Are We To World War 3

In July of 1944, as World War II was still raging, 730 delegates from all 44 Allied nations gathered in Bretton Woods, New Hampshire in the United Kingdom to setup institutions and procedures to regulate the international monetary system and to establish the rules for commercial and financial relations among the world’s major industrial states and the Petrodollar as we know it today was born. This was no mere coincidence. The United States future had been set in stone, it would be come the new strong arm of what we call the Illuminati. The ruling elite that control the worlds wealth. It would ensure that the US would have an unending stream of cash to build its vast military and propel itself to become the most technologically advance military on the planet. Its purpose was unknown to many at this point, but some may argue that this was the very first steps made towards World War III and WWII hadn’t even finished yet. At this point the Russian Army had made huge advances on the eastern front. It had decimated Hitlers military. Something which the allies had been struggling to do. Was it this threat that the Allies were preparing for? Was the US established as the new strong arm to eventually counteract the might of the Red Army?

I wont list everything that has happened since then until now, maybe something for another article in the future. But fast forward to present day. Russia has now effectively pulled out of the Petrodollar alongside their closest allies China. So what does this really mean?

As history has shown, anyone who opposes or leaves the petrodollar inevitably finds themselves as public enemy no.1 and in a perpetual state of war. A quick glimpse back to the last couple decades would be enough to convince you of this, Iraq, Afghanistan, Libya and most recently Syria.

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But the recent departure of Russia from the Petrodollar was different. The US and its Saudi counterparts in an act of war effectively forced Russia into removing itself from the Petrodollar by driving up oil production so much that Oil prices dropped drastically and began destroying the Russian economy. An economy vastly reliant on high oil prices.

Back in November, before most grasped just how serious the collapse in crude was (and would become, as well as its massive implications), ZeroHedge wrote “How The Petrodollar Quietly Died, And Nobody Noticed“, because for the first time in almost two decades, energy-exporting countries would pull their “petrodollars” out of world markets in 2015.

This empirical death of Petrodollar followed years of windfalls for oil exporters such as Russia, Angola, Saudi Arabia and Nigeria. Much of that money found its way into financial markets, helping to boost asset prices and keep the cost of borrowing down, through so-called petrodollar recycling.

ZeroHedge added that in 2014 “the oil producers will effectively import capital amounting to $7.6 billion. By comparison, they exported $60 billion in 2013 and $248 billion in 2012, according to the following graphic based on BNP Paribas calculations.”

PetroDollar Chart - CLICK TO ENLARGE

PetroDollar Chart – CLICK TO ENLARGE

The problem was compounded by its own positive feedback loop: as the last few weeks vividly demonstrated, plunging oil would lead to a further liquidation in foreign reserves for the oil exporters who rushed to preserve their currencies, leading to even greater drops in oil as the viable producers rushed to pump out as much crude out of the ground as possible in a scramble to put the weakest producers out of business, and to crush marginal production. Call it Game Theory gone mad and on steroids.

Ironically, when the price of Oil started its self-reinforcing plunge, such a death would happen whether the petrodollar participants wanted it, or, as the case may be, were dragged into the abattoir kicking and screaming.

It is the latter that seems to have taken place with the one country that many though initially would do everything in its power to have an amicable departure from the Petrodollar and yet whose divorce from the USD has quickly become a very messy affair, with lots of screaming and the occasional artillery shell.

As Bloomberg reports Russia may unseal its $88 billion Reserve Fund and convert some of its foreign-currency holdings into rubles, the latest government effort to prop up an economy veering into its worst slump since 2009.”

These are dollars which Russia would have otherwise recycled into US denominated assets. Instead, Russia will purchase even more Rubles and use the proceeds for FX and economic stabilization purposes.

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“Together with the central bank, we are selling a part of our foreign-currency reserves,” Finance Minister Anton Siluanov said in Moscow today. “We’ll get rubles and place them in deposits for banks, giving liquidity to the economy.

Call it less than amicable divorce, call it what you will: what it is, is Russia violently leaving the ranks of countries that exchange crude for US paper.

But this is only the beginning, just last week, Russia cut off its natural gas supply to Europe, “plunging the continent into an energy crisis ‘within hours’ as a dispute with Ukraine escalated,” reports the Daily Mail. 

“This morning, gas companies in Ukraine said that Russia had completely cut off their supply. Six countries reported a complete shut-off of Russian gas shipped via Ukraine today, in a sharp escalation of a struggle over energy that threatens Europe as winter sets in.”

This could be seen as a prelude to war. The US unable to take on Russia physically (yet), have launched what many are considering to be masterclass in Economic Warfare which has badly crippled Russia. Forcing them to exchange all their US Dollars for Rubles to help prop up their economy, leaving them virtually unable to buy Oil from the Middle East. A huge risk considering the Rubel is one of the worst performing currencies on the planet. Cutting off supply of Gas to Europe is Russias direct reaction to the economic war and what could be seen as the first in a series of defensive precautions before war.

Russia may convert as much as 500 billion rubles from one of the government’s two sovereign wealth funds to support the national currency, Siluanov said, calling the ruble “undervalued.” The Finance Ministry last month started selling foreign currency remaining on the Treasury’s accounts.

The entire 500 billion rubles or part of the amount will be converted in January-February through the central bank, according to Deputy Finance Minister Alexey Moiseev. The Bank of Russia will determine the timing and method of the operation.

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The ruble, the world’s second-worst performing currency last year, weakened for a fourth day, losing 1.3 percent to 66.0775 against the dollar by 3:21 p.m. in Moscow on 13th January. It trimmed a drop of as much as 2 percent after Siluanov’s comments. The ruble’s continued slump this year underscores the fragility of coordinated measures by Russia’s government and central bank that steered the ruble’s rebound from a record-low intraday level of 80.10 on Dec. 16. OAO Gazprom and four other state-controlled exporters were ordered last month to cut foreign-currency holdings by March 1 to levels no higher than they were on Oct. 1. The central bank sought to make it easier for banks to access dollars and euros while raising its key rate to 17 percent, the emergency level it introduced last month to arrest the ruble collapse.

So how close are we to World War III?

Russia has taken some serious hits over the last few months. With the Oil prices dropping it wont be long until these fire sale prices begin to damage the US economy as well. That along side the removal of one of the worlds largest Oil importers from the Petrodollar could see some serious implications for the US. It is unlikely the US will allow this to happen and it wont be long till the US Military Industrial Complex will be called upon to rescue the US Economy, that’s assuming Russia do not decide to make the fit move?



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Further Reading:


World War III: the unthinkable cost of preserving the petrodollar