Guest Post: "On The Path To War", by Chris Martenson of Peak Prosperity

Wed, Aug 13, 2014 - 10:08pm

"Out of several reasons that US power brokers specifically -- but western power brokers more generally -- are deeply unhappy with Russia right now is that Russia is committing a cardinal sin: it is openly, brazenly calling for an end to dollar dominance and has moved aggressively with China to achieve that aim. No oil-rich country that has tried to move away from the dollar in the past twenty years has managed to do so without being attacked by the US, suffering a regime change, or being ruined by sanctions. In some cases, all three."

Longtime Turdites know that Chris Martenson of is a good friend of Turdville. With events in Ukraine rapidly moving toward a wider conflict, I asked Chris if I could re-print his latest piece as "guest post". He gladly obliged and I urge you to read this as soon as possible. When you're finished, please forward it to your friends and family. Having been fed a steady diet of western media malaise and disinformation, this piece might serve as a real eye-opener.


"On The Path To War", by

Chris Martenson of Peak Prosperity

The US is clearly now pushing Russia towards war. But if you read the signs correctly, Russia has been preparing for exactly this outcome for many years.

Out of several reasons that US power brokers specifically -- but western power brokers more generally -- are deeply unhappy with Russia right now is that Russia is committing a cardinal sin: it is openly, brazenly calling for an end to dollar dominance and has moved aggressively with China to achieve that aim.

No oil-rich country that has tried to move away from the dollar in the past twenty years has managed to do so without being attacked by the US, suffering a regime change, or being ruined by sanctions. In some cases, all three.

Not only has Russia managed to secure a string of heavy-duty bilateral trade and currency swap agreements over the past year, but they've done so despite ever-increasing threats and responses from the US and its allies. And frighteningly, the equity markets in the West are completely ignoring the nested set of risks that accompany these moves and countermoves by two geopolitical heavyweights, which range from punishing trade wars (already underway), to electronic warfare, to an actual shooting war.

Today's "Markets"Are Untethered From Reality

I put the word "markets" in quotes above because whatever it is that passes for an equity market these days, it bears little resemblance to that of times past.

The "markets" today are using the skimpiest of evidence to support their tendency to feast on fresh central bank liquidity by either levitating higher or failing to go down much on even the most horrendous of geopolitical, economic or environmental news.

As a prime example, in the pre-market on Friday, 8/7/14, beginning in the wee hours of the morning, the S&P futures ramped up 20 points off the lows by market open, and then poured on another 20 points in the cash market.

The reason given? The possibility of calm in Ukraine:

Pre-market Dow reversal illustrates Ukraine sway over markets

Aug 8, 2014

In a sign of just how much stock market moves are being driven by geopolitical headlines from abroad, pre-market futures for the Dow flipped from sizable losses to modest gains after reports that Russia is moving to de-escalate the Ukraine crisis.

Increasingly, every tick of the tape on Wall Street is being driven by news flashes related to bad things happening overseas, including the Russian role in the 5-month-old crisis in Ukraine.

“We are in one of those moments where markets sway on war or no-war rumors,” says Gary Kaltbaum, president of Kaltbaum Capital Management.

The Dow, which is coming off a 75-point drop Thursday, knocking it down 4.5% from its July 16 record close, did an about face this morning, going from down 100 points in pre-market trading to up 42 points.

Wall Street is citing the following news reports for the rebound:

According to Bloomberg: “U.S. equity-index futures rebounded after RIA reported Russia is making efforts to de-escalate the Ukraine conflict. RIA cited Russian Security Council head Nikolai Patrushev.”

(“Russia will continue to make all efforts for a very fast de-escalation of tensions,” Nikolai Patrushev told RIA, a state-run Russian news agency.)

That is about as poor of an excuse for a major market reversal as any I have run across lately. They might as well have said that Cher is considering expanding her next tour by four cities as being the "reason".

For starters, consider the source. Was it Putin himself? No. Instead, it was the very same guy that the EU had just added to their sanctions blacklist a few weeks ago:

EU Blacklists Russia’s Federal Security Chief, Security Council Secretary

Jul 26, 2014

MOSCOW, July 26 (RIA Novosti) – The European Union has added key Russian officials to the blacklist, including Russian Federal Security Service chief Aleksander Bortnikov and Russian Security Council Secretary Nikolai Patrushev.

Did he say anything concrete, such as that meetings were going to be held and that constructive solutions were on the table that Russia might find agreeable?

No. All he parroted was the standard Russian talking point, which Putin himself has used many times, that Russia hopes for a rapid return of peace to Ukraine.

That's it...and so I have to ask: That's worth forty S&P points?

On the other side of the ledger, the one pointing to escalating tensions, we have a lot of very credible items that any sane person would easily think vastly outweigh a single talking-point sentence by a Security Council member.

For example, consider this:

Moscow’s food ban could cost EU $16bn, spark crisis in Europe

Aug 7, 2014

Russia’s ban on agricultural food imports could cost the European Union about $16 billion (12 billion euro) and drag the continent into the crisis, officials warn.

The Russian government signed a decree on Thursday which bans the import of beef, pork, poultry, meat, fish, fruits and vegetables, cheese, milk, and dairy products [for one year] from the EU, US, Australia, Canada, and Norway.

Now why would a country that's about to announce that it's going to seek a rapid return to peace in Ukraine on Friday, pass this particular and Draconian decree on Thursday? That just doesn't make sense. And of the two, if I get to choose between a year-long food ban and a single sentence by a Security Council member, I'm going to have to go with the idea that the food ban is telling us more about the actual state of things.

Such a ban will cause a lot of hardship in Russia. We can expect food price spikes for sure, and possibly even food shortages, too. Therefore, it was not done lightly.

This food ban followed the cancelation of a Russian defense deal by Germany two days prior:

Germany Just Canceled a Defense Deal With Russia - Who’s Next?

Aug 6, 2014

As European countries try to balance their economic dependence on Russia with their desire to punish president Vladimir Putin for meddling in Ukraine, Germany has stepped ahead of the pack to poke the bear in the eye, canceling a €123 million ($165 million) defense deal with Moscow earlier this week.

In response, the Kremlin has said it will sue Rheinmetall, the German defense firm that was to supply parts for a military training facility for the Russian military. The deal, signed in 2012, was suspended by Berlin shortly after the annexation of Crimea in March; this week’s move permanently bars the delivery of the equipment. Last week the European Union banned all arms exports to Russia, but that only covers future deals.

The scuttled deal was simply for parts for a training facility, the sort of thing that might just as easily have been covered under normal import and export trade agreements. But since the facility was military in nature, it fell to the sanction sword.

And only a day prior to that, Putin called for an emergency meeting of the UN Security Council:

Russia Calls For Emergency UN Security Council Meeting As Troops Fortify On The Border

Aug 5, 2014

Russia called for an emergency meeting of the United Nations Security Council on Tuesday over what it called an urgent humanitarian situation in Ukraine, according to a report from the Russian news agency ITAR-TASS.

"We are convening an emergency meeting of the United Nations Security Council on the humanitarian situation in Ukraine," Russian Ambassador to the U.N. Vitaly Churkin was quoted as saying.

Earlier on Tuesday, the Russian Foreign Ministry said the U.N. and the International Committee of the Red Cross expressed "readiness" to discuss its plan to deploy a "humanitarian mission" to Ukraine, which some consider to be a pretext for an invasion by Russian forces.

The White House has openly worried about what would be, for all intents and purposes, an invasion under the guise of a "peacekeeping" operation.

"We’ve seen a significant re-buildup of Russian forces along the border, potentially positioning Russia for a so-called humanitarian or peacekeeping intervention in Ukraine," deputy national security adviser Tony Blinken said last week.

Those quotes by US officials make it sound unreasonable for Russia to be considering a "so-called humanitarian intervention" into Ukraine. And most in the West might agree with that assessment because the western press is virtually unanimous in its failure to cover the actual humanitarian crisis that is happening over there right now.

But other countries are not ignoring it. For instance, as reported by the Japanese press, we find that entire cities, packed with hundreds of thousands of civilians, are under constant bombardment by Kiev forces:

East Ukraine city dying under siege

Aug 5, 2014

DONETSK, Ukraine —

Residents say the eastern Ukrainian city of Luhansk is dying. The power grid was completely down Monday, the city government said, and fuel is running dry.

Store shelves are emptying fast, and those who haven’t managed to flee must drink untreated tap water. With little medicine left, doctors are sending patients home.

As Ukrainian government forces slowly tighten their ring around the city — one of two major pro-Russian rebel strongholds — traveling in and out has become a perilous undertaking.

In an impassioned statement released over the weekend, mayor Sergei Kravchenko described a situation that is becoming more unsustainable by the day.

“As a result of the blockade and ceaseless rocket attacks, the city is on the verge of a humanitarian catastrophe,” Kravchenko said. “Citizens are dying on the streets, in their courtyard and in their homes. Every new day brings only death and destruction.”

Luhansk, a city of more than 400,000 people at peacetime, now has seen its population dwindle as citizens flee violence and deprivation. Located about an hour’s drive from Russia, which Ukraine insists is supplying rebels with weapons and manpower, Luhansk is being fiercely fought over by all sides of the conflict.

What would the US, the UK, Germany or Japan do if several million of their native-tongued people living right along their border were under siege by a possibly illegitimate government force that had openly expressed its desire to kill as many of those people as it could?

I think we all know the answer to that: they'd already be in there with humanitarian and possibly also military support. Heck, the US invaded an entire country 7,000 miles away under the pretext that Iraq might have WMD's that could someday, possibly, be used against American interests. And Iraq never once openly threatened the US.

But to top it all off, there was a second recent news item which was the most frightful bit of news that anybody in Europe could ever hope to hear. And if it happens, it will be an open act of war against Russia by Ukraine:

Ukraine Open to Halting Gas Flows in Russia Sanctions

Aug 8, 2014

Ukraine said it’s open to halting Russian gas supplies to Europe through the country as it plans sanctions on President Vladimir Putin’s government as part of its battle against pro-Russian separatists.

The list of possible sanctions includes a “complete or partial ban on the transit of all resources,” Prime Minister Arseniy Yatsenyuk told reporters in Kiev today in response to a question about halting gas flows.

Measures may also include a ban on Russian planes overflying Ukraine, he said, while defense-industry cooperation will be reduced. A draft law, which requires parliamentary approval, also proposes restrictions on ships entering Ukrainian waters.

Good grief! If Ukraine halts the gas flows, Europe will be in big trouble and very quickly. I have to assume that EU ministers are reading the Ukraine leadership the riot act.

But this news is also a very strong sign of escalation, not de-escalation. And so the 'market' response to the statement by Russian Security Council Sec​retary Nikolai Patrushev is really grasping at straws. For my money the gap between the news events and the 'market' reaction is so huge that I have to wonder if there isn't a different explanation that makes more sense, such as a Plunge Protection Team intervention at a critical moment as US stock futures were headed over a cliff (which they seemed to be before the miracle reversal).

However, even if such interventions are occurring, they cannot change the tide. Something has been put in motion that cannot be easily undone, And Russia is furiously signing deals that are a far greater risk to the US than anything happening in some remote corner of eastern Europe.

In "Part 2: The End of Dollar Dominance?" we look at the reason that suddenly makes the US' reckless aggression towards Russia much more understandable: Russia is pivoting from West to East, and in the process, seeking to diminish the dollar's supreme regime as the world's reserve currency. When viewed through this lens, Russia's prodigious string of recent trade and energy deals with eastern nations suddenly looks very calculated, and the US' itchy nervousness in response makes more sense.

What are the implications if we are entering the Peak Dollar era? One we know for sure is: today's "markets" are vastly under-pricing, if not ignoring altogether, that risk.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

About the Author

turd [at] tfmetalsreport [dot] com ()


Aug 13, 2014 - 10:16pm

First ever first!

First ever first!

Aug 13, 2014 - 10:27pm



Aug 13, 2014 - 10:28pm

Unsubstantiated but this is

Unsubstantiated but this is the first tweet I've seen:

Aug 13, 2014 - 10:44pm

Harvey's Up (TFMR)

Harvey's Up!

  • Mark O'Byrne: Gold is tethered to the $1,305/oz to $1,310/oz level again this morning - as it was for much of yesterday after ending Tuesday little changed for a second session. Gold has barely moved since late Friday, after closing last week at $1,309/oz despite heightened geopolitical risk. Gold is marginally higher in London this morning after gold in Singapore fell marginally to test $1,305/oz overnight again. Futures trading volume was 39% below the average for the past 100 days this morning and the lack of liquidity is contributing to lackluster trading.
  • Harvey: The big news today was the fact that silver at the Shanghai Metals Exchange went into severe backwardation to the tune of 8%. Also in two weeks we have witnessed a massive exodus of silver from their vaults from 47.5 million oz on August 1 to 44.6 million oz yesterday. In March 2013, they had over 340 million oz stored. Probably in 7 months the Shanghai silver metal will be depleted upon which fact China will no doubt demand its lent silver back from the USA. Then the fun begins. In Iraq, USA "advisors" have landed where the Yazidis are surrounded by ISIS. Drones have fired upon positions held by ISIS trying to liberate them and give them safe passage from the mountain. The Russian convoy are almost at the border with Ukraine. We should see some fireworks tomorrow. The Ebola manifestation is causing alarm bells all over the world where the CDC just called the alert a Category 1 (the highest). The virus is now in 5 countries. The virus is airborne and there is no cure. If a person has been hit with it, the only way he can survive is to be kept alive for 5 to 6 weeks, allowing for one's own antibodies to be produced to kill the virus. The death toll is now over 1000 people.
  • GoldCore on the new silver fix: The Financial Times reported overnight on the uncertainty regarding the 117 year old silver price fix. Since there is no centralised clearing for precious metals markets, the initial users of the new benchmark are expected to be the 11 market-making members of the London Bullion Market Association, which include Credit Suisse, JPMorgan, Goldman Sachs and UBS. But so far no one has publicly stepped forward to say they will be involved even though testing of the system has gone without a hitch. The CME Group, whose Comex exchange offers the biggest silver futures contract, is providing the electronic price platform and the algorithm that will be used to set the auction’s opening price. Thomson Reuters will take care of the governance and administration.” Interestingly, the FT also reports that there may be significant buying of silver in the coming days: “Indeed, there are already rumours in the market place that some big silver producers and consumers are preparing to pepper the market with orders.” This creates the possibility of the short squeeze that many market participants and silver analysts have been expecting for some time.
  • GoldCore on concerns about the silver fix: From our point of view, the replacement of a handful of banks with CME and Thomson Reuters was a positive development. However, the devil is in the detail and it is important that the new price discovery mechanism is transparent and that there is regulatory oversight. CME are the U.S.' largest and the world's second largest futures and options exchange and we would have a concern that the new fixes are derived solely from futures trading and electronic trading rather than from actual supply and demand in the physical market. Our concerns are due to the abuses that have been seen with regard to rogue traders, 'dark pools' and high speed computer trading. The CME themselves have acknowledged that markets are manipulated via high speed computer programs. Market participants need reassurance that such manipulation will not affect the new London Silver Price. We believe that the recent rigging of the gold price, as seen in the FCA's findings against Barclays, means that there should be financial regulation and oversight of the new fixing process by regulatory authorities.
  • Harvey: Shanghai silver has just gone into severe backwardation by 8% as the front August month has a huge premium to the December contract month. This signifies huge shortage of metal. Also Shanghai vaults have fallen again. If you will recall, August 1/2014 had inventory of 148 tonnes of silver ( 47.5 million oz). Yesterday, August 12 the silver inventory was 137.67 tonnes or 44.26 million oz. Last March the inventory was over 1100 tonnes (over 320 million oz) of inventory so this silver is rapidly being depleted in Shanghai.
  • Chris Powell: Hong Kong fund manager William Kaye today tells King World News that silver is the key to the monetary metals market. "Trading in the paper market for silver doesn't reflect the fundamentals at all," Kaye says. "This is reflected, among other things, in very significant premiums in Shanghai and other places. So this is not a sustainable situation and it has to be addressed in some way. "I think for the people who are primarily long gold, and that would include us, this bodes very well because we can anticipate that if silver goes higher, the gold market should follow.”
  • Chris Powell: Bloomberg News acknowledges offhandedly today that by restricting the import of gold into the country India's government intends intervention in the currency market, supporting the rupee. Maybe in another few decades Bloomberg will get around to noting the involvement of other central banks in the gold market for currency-support purposes. The Bloomberg story is headlined "India Gold Imports Seen Dropping as Rajan Protects Rupee"
  • Prasanta Sahu: Indian gold smugglers, locked in a cat-and-mouse game with customs officials, are always searching for new ways to hide the precious yellow metal and get it into the country without being detected. Among their latest innovations: Mixing gold dust with henna powder or encasing it in chocolate. Thanks to high duties imposed last year in an effort to reduce gold imports and improve country’s trade balance, gold smuggling has risen sharply, Indian authorities say. The government says that from April through June it intercepted $44 million of smuggled gold at the country’s airports. That compares with $82 million in the year ended March 31. India is the world’s second largest consumer of gold. Gold is a popular way for Indians to store wealth and gold jewelry is considered essential for weddings and other important social occasions. So enforcing the new import taxes has been tough.
  • Tyler Durden: If it was crashing German business confidence yesterday setting the somber mood for European economic "growth" in the second half, with a European GDP decline if not outright contraction now almost practically inevitable, then overnight it was disappointing data from virtually every other spot in the globe (and Europe again) to hammer the message in, starting with a historic 6.8% drop in Japanese GDP driven by a record plunge in consumption, quickly followed by total social financing out of China which in aggregate rose by only RMB273.1bn in July, or just 18% of what was expected, with missing industrial production and retail sales just the cherry on top. Then it was Europe's turn again, where June Industrial Production contracted -0.3% on expectations of a 0.4% increase, to set the stage for tomorrow's Eurozone GDP print which, following Italy's triple-drip recession shocker last week, probably means it will be not only Japan but also Europe which are about to have taken a sharp move for the worse.
  • Zero Hedge: Compared to the 3.6% drop in GDP when Japan last hiked its consumption tax in 1997, today's Q2 GDP collapse of 6.8% annualized is an utter disaster (even if it is slightly better than the expected -7.0% expectations thanks to a surge in the deflator). Inventory additions added 1.0% growth. Consumer Spending collapsed 5.2% QoQ - the most on record. Of course, in the traditional of Keynesian hockey-sticks, this XX% collapse in Q2 is expected to surge back to a 2.5% growth figure in Q3 and lead Japan to the holy grail once more.. only it didn't quite work out that way last time for Japan.Simply put this is the worst possible outcome for bulls, small beat not enough to rejuice QQE.
  • Alex Lantier ( A Thursday article in the New Straits Times, Malaysia's flagship English-language newspaper, charged the US- and European-backed Ukrainian regime in Kiev with shooting down Malaysian Airlines flight MH 17 in east Ukraine last month. Given the tightly controlled character of the Malaysian media, it appears that the accusation that Kiev shot down MH17 has the imprimatur of the Malaysian state. The US and European media have buried this remarkable report, which refutes the wave of allegations planted by the CIA in international media claiming that Russian president Vladimir Putin was responsible for the destruction of MH17, without presenting any evidence to back up this charge. The New Straits Times article, titled "US analysts conclude MH17 downed by aircraft," lays out evidence that Ukrainian fighter aircraft attacked the jetliner with first a missile, then with bursts of 30-millimeter machine gun fire from both sides of MH17.
  • Zero Hedge: United States Marines, special forces and the USAID disaster assistance relief team briefly landed today on Mt. Sinjar in Iraq, a U.S. official told ABC News. It was the first time ABC News has learned of any Americans landing on the mountain, where thousands of Yazidis are trapped and facing a humanitarian crisis. Defense Secretary Chuck Hagel announced on Tuesday that the United States has sent a 130 member military assessment team to Erbil in the autonomous Iraqi province of Kurdistan to determine what further assistance the U.S. can provide to the Yazidis. Lol: "briefly". It didn't take long for Obama's latest stern promise that no US troops would be on the ground to become... troops are now on the ground.
  • Tyler Durden: A report in The New England Journal of Medicine traces the spread of the recent Ebola outbreak from Gueckedou, Guinea, to nations worldwide. As The NY Times reports,West African governments have gone 'medieval' as they have revived a disease-fighting tactic not used in nearly a century: the “cordon sanitaire,” in which a line is drawn around the infected area and no one is allowed out. And most worryingly, Reuters reports that a nurse who had close contact with a Liberian Ebola patient skipped quarantine in Lagos and went to her home in the eastern city of Enugu, where she made contact with 20 other people.
  • Michael Snyder: How in the world is it possible that more than 170 health workers have been infected by the Ebola virus? That is the one question about Ebola that nobody can seem to answer. The World Health Organization is reporting this as a fact, but no explanation is given as to why this is happening. We are just assured that Ebola “is not airborne” and that getting infected “requires close contact with the bodily fluids of an infected person”. If this is true, then how have more than 170 health workers caught the disease? These workers are dressed head to toe in suits that are specifically designed to prevent the spread of the virus. So how is this happening? I could understand a handful of “mistakes” by health workers, but this is unlike anything that we have ever seen in the history of infectious diseases. These health workers take extraordinary precautions to keep from getting the virus. If it is spreading so easily to them, what chance is the general population going to have?
  • Tyler Durden: How much longer can the myth of a housing recovery remain alive in the mainstream media's narrative? The smoothed average of Mortgage Applications in the US fell to its lowest since September 2000 this week. Mortgage applications have slumped for 9 months... as mortgage rates have declined notably... but still we are told 'rates are just too high'. And yet, bullish market protagonists are convinced rates are due to rise (and the bond market is wrong) - one can only imagine the slump if that should occur.

All this and much more on...

The Harvey Report! smiley


Spartacus Rex
Aug 13, 2014 - 10:52pm

The Path To War Is Paved w/ Fiat!

Keep Off The War Path!

Redeem the Banksters' Fiat into Lawful Money U.S. Dollars of Gold / Silver Coin (ie "$" @ .900 fine/ "90%").

That way your Money is your own Private Property, and NOT the BANKSTERS!

And as an added BONUS, it is thus then guaranteed "secured" by the 5th Amendment of the U.S. Constitution.

Cheers, S. Rex

Aug 13, 2014 - 10:55pm

Just received this in a

Just received this in a letter today from Albany

"Dear EBT Cardholder,

There will be a period of time in either September or October 2014 when access to your EBT benefits will not be available for food and cash purchases or for cash withdraws while NYS changes EBT vendors. This period may last as long ad 24 hours.

When the exact dates and times are known, this information will be made available online. You will need to plan your food and cash purchases and cash withdrawals during this period accordingly. "(Emphasis mine)

This should be a wake up call to all of us who receive any type of benefit to prepare accordingly. Yes, this should only be for a day, but what if it were to last longer? What if they just cut off benefits to you for reason x,y,or z? This is a first, in my two years of receiving benefits, but I'm sure, with the way things are going here in NYS it may not be the last time something along these lines is seen.

Strongsidejedi Lintltj5
Aug 13, 2014 - 10:56pm

@Lintltj5 - EBT question

I have a question for you.

Which bank processes the EBT accounts in New York State?

Is it Bank of America? JPM Chase? or TD Bank? or other?

Aug 13, 2014 - 11:23pm
Aug 13, 2014 - 11:31pm

Wake up Germany, Wake up...Wake up

Most exellent from It turns out that when the Americans spoke loudly and sharply with the German chancellor, whom they for all these years have kept under surveillance like some sticky-fingered housemaid, the entire German society leaped up like a submissive dog running obediently to its American master…. even when the conflict with Russia goes against German economic and political interests.

Strongsidejedi Lintltj5
Aug 13, 2014 - 11:55pm

@Lintltj5 - EBT comment

Makes me wonder what is really going on here.

JPMC then gets to sit on the EBT funds from New York State.

Bank of America is the EBT card processor for all funds from State of California.

But, now, essentially a bank holiday is declared for 24 hours?

I wonder if Bank of America has something similar occurring in California?

Aug 14, 2014 - 12:15am


Please excuse the posting on multiple threads, but this is incredible!

History does not always repeat itself, but it sure can rhyme! I don't know how much of this can be validated, but I imagine there is some truth to it, even if only slanted. Hopefully some fellow turdites will independently assess and evaluate.

Perhaps this matter has already been brought up in Silver Sooner's Ukraine forum. I haven't kept totally up to date on that, so if this is already known, please forgive the duplication, but even so, I think it is worth repeating. I'll post this there as well.

These revelations deepen the Ukraine situation dramatically, and introduces some historical facts rendering current animosities more salient and understandable!!


I came across this link as footnote 53, reading up on the "holodomor" in wikipedia:

Read on and be prepared to be totally amazed:

The theory of the Holodomor is reactivated in the media every time Ukraine is about to take a step back to Russia. Just to remind those who are not aware of the tragedy, in 1932-1933 there was a severe famine throughout the USSR that claimed an unprecedented number of lives (up to 7 million victims, according to some debatable estimates). Paradoxically the famine mostly affected fertile areas in the North Caucasus, the Volga basin, the South Urals, Western Siberia, Ukraine, Belorussia and Kazakhstan. During the last decade several Western historians were recruited to elaborate on the theory that the famine tragedy was a deliberate act of genocide against Ukrainians carried out by Stalin’s government. Let’s consider the historical facts and try to get closer to the truth regarding the issue of the sources and circumstances of that horrible famine in the USSR.

First of all we have to recall something about the Gold, which surprisingly not always is a mean of payment…

In early 1920s the recently proclaimed Soviet Union was anxious about restoration of its industry totally destroyed after WWI and Civil War in Russia (1918-1921). The Soviets desperately needed modern machinery and industrial equipment. How could they pay it? Soviet government was able to offer to the international market three items: grain, minerals and gold.

Soviet Golden Chervonets, 1923

Soviet Golden Chervonets, 1923

On Genoa Conference in 1922 the new Gold Exchange Standard was introduced. Since the end of 1922 the Soviet Union was issuing the golden chervonets – a new Soviet currency fully covered by the golden reserves and convertible to gold. In 1923 the Soviet chervonets was one of the most stable and secured currencies of the world. It represented a clear and present danger for emerging financial epicentre – the United States of America The economic and financial weight of the United States boomed astonishingly as the result of global war. That country was one of few beneficiaries of the man-slaughtering house in Europe of 1910s. But an unexpected rival from the Bolshevik stated emerged vigorously…

In 1924 the Soviet chervonets was replaced by a softer rouble without golden equivalent. The menace to the US dollar and British pound was diminished. In return Soviet Union was recognized by the UK, France, Norway, Austria, Greece, Sweden, Denmark, China, Japan, Mexico and other countries. The United States possessed 46% of golden reserves of the capitalist world.

In 1925 the Soviet leadership decided to accelerate industrialization of the country. Quite surprisingly despite enormous economic gains promised by such policies, the Western countries refused to accept gold as payment when trading with Soviet Union! This amazing behaviour of is known in history as the “gold blockade”. The USSR could pay for machinery and equipment only by oil, timber and grains. (Interestingly, they still accepted pre-revolution Imperial Russian golden coins – the currency of a non-existent state was not dangerous!)

In 1929 the US bankers initiate the Great Depression. The short period of international currency exchange stability was over.

In 1931 Germany and Austria failed to repay the foreign debt and stop exchanging marks into gold, thus abolishing Gold Exchange Standard. By the autumn 1931 the UK suspends the gold exchange as well.

As you see, it would be a logical and natural move to lift the golden blockade of Soviet Union at that time, thus allowing Soviet gold to relieve the suffocating Western economies. But the decision they was taken at that circumstances was shocking in its absurdity. They not only left the gold blockade of the USSR in force, but also imposed a severe trade embargo on the major part of Soviet export! It was done despite acute economic crisis in the West where most producers were interested in any kind of demand, especially paid by gold, timber, oil and other raw material from the Soviet Union. E.g. in 1932 80% of British machinery export was being supplied to the USSR. Nevertheless, on April 17, 1933 the British government introduced embargo: Russian Goods (Import Prohibition) Act 1933! What was the logic? It was a politically motivated decision to pressure the tenacious Soviet government powered by the antagonistic ideology and economic structure.

Was the traded between the West and the USSR totally cut down? Absolutely not. Soviet demand for Western technologies and machinery was even higher than ever: the industrialization was full-pelt. But now the West was expecting only one mean of payment: the Soviet grains! (The curiosity of this claim is emphasized by the fact that by that time the currencies of the most agrarian countries were significantly devaluated and the demand for grains on world market was cut 50-70%!)

The Stalin’s government was faced with a choice: either to give up restoring industry, so capitulating to the West, or continue industrialising, leading to a dreadful internal crisis. If the Bolsheviks took grain away from the peasants, there was the very great probability of a famine which, in turn, might lead to internal unrest and removal from power. So no matter what Stalin chose, the West would remain victorious. Stalin and his entourage decided to force their way through and stop at nothing.

The government collected grain and sent it to the West, but not to starve part of a country’s population to death, but because there was no other way it could pay for the supply of equipment. All of Stalin’s hopes were on a new harvest. It turned out to be a small one, however, since the country was struck by a drought. The USSR was unable to buy food in exchange for gold (the gold blockade) or currency (as a result of the embargo there was none). Attempts were urgently made to get supplies of grain from Persia, where they had agreed to accept gold. The authorities did not have time, however, as a catastrophe was already underway.

Famine Victims, Kuban, 1932

Famine Victims, Kuban, 1932

Between 1932 and 1933, thousands and thousands of people died and it was only after this that the West was once again renewed to accept oil, timber and precious metals from the Soviets.

In October 2008, the European Parliament recognised the Holodomor in the Ukraine as a crime against humanity. The guilty was put on the ‘Stalinist USSR’. However, the report by the European Parliament did not provide answers to two questions:

• why did the capitalists behave so “strangely”, refusing to accept Stalin’s gold?

• why did they only want to receive grain from the USSR as payment?

There is neither truth nor logic in the European Parliament’s reports. The truth is that in 1934, grain exports from the USSR completely stopped. By order of the Soviet government…

The famine of 1932-33, which was carefully organized by the West, did not have the desired effect: the Bolsheviks remained in power. They continued industrializing. Economic measures had no effect – Stalin was restoring the country at any price. Only military measures remained. And exactly in 1933 Adolf Hitler, who had openly written about his expansionist aims in the vast Russian plains, came to power in Germany…

Aug 14, 2014 - 1:08am


is due to deliver his speech Thursday in Yalta where it is currently 9:08 am as it is 8 hours ahead of EDT.

Aug 14, 2014 - 4:22am

Quote:In "Part 2: The End of


In "Part 2: The End of Dollar Dominance?" we look at the reason that suddenly makes the US' reckless aggression towards Russia much more understandable: Russia is pivoting from West to East, and in the process, seeking to diminish the dollar's supreme regime as the world's reserve currency. When viewed through this lens, Russia's prodigious string of recent trade and energy deals with eastern nations suddenly looks very calculated, and the US' itchy nervousness in response makes more sense.

What are the implications if we are entering the Peak Dollar era? One we know for sure is: today's "markets" are vastly under-pricing, if not ignoring altogether, that risk.

This is the plan between Rocks and Roths and it is in execution phase and Russia is needed for China to kickstart reserve currency and Putin is just forced and playing along and USA is exerting pressure to make it happen in time line alloted for USD. In principles, it this does not happen, USD will enter final devaluation phase by the end of 2015.

How can people not understand that in current situation, unloading of world reserve currency partially from USD is the only way to save it? That Roths demand it and Rocks understand that to keep the banker system working, as duopoly though, they have no other option? Roths are controlling the pace, Rocks are executing. That its no a thing, like pushing Russia into Chinese arms is one of major points of the plan? Why would people think that Rocks does not understand what they are doing? They understand perfectly well as does Putin and Chinese. Its all moving in sync. Europe is left to suffer, and rightly so, as it has no sovereignty- it has not enough military force , its defense is outsourced to the USA.

The other option is hyperinflation in USD. That will never happen , be sure. It has no benefits for banker system whose continuation is the whole point of all these exercises. At least not for next 20 years when China may want to remove USD totally from reserve currency field.

What is bad with USD sharing reserve currency market with remnibi? The power to print USD, give loans and run deficits will be smaller. So will the ability to arm and project military power. Otherwise, as long as USD keeps reserve currency status as part of more balanced duopoly, it ill regain stability and less dependence on Roths actions on gold price-by giving up part of its unilateral power. This is nothing new in collapse phase of debt empires- Rome installed 2 Emperors in 286 ( Diocletian and Maximian) as rule from One OLD center in the Eastern Roman Empire was not possible any more as new provinces ( Western Europe) gained more power. Splitting duties prolonged normalized existence of Roman Empire for 40 years after 3rd century chaos ( marked by devaluation of denarius akin to devaluation of USD vs gold) ; till in 324 Constantine returned to single Emperor status. (That would correspond to chinese yuan a sole reserve currency by approx 2056; expect serious WWWIII level hostilities prior to this event).

So the period of sharing reserve currency is natural part of process of moving power from USA and Rocks to China over 40 year period from around now. Here is the comparative currency devaluation chart to see where we stand in comparison to Roman times. Its year 282 today, almost exactly.

What else is so BAD for the USA population/elite of the choice is between sharing what has become an unsustainable burden to the USD and hyper inflating USD? I think sharing has obviously less disruptive consequences, though hyperinflation will wipe out ruling class wealth ( in Germany hyperinflation episode, top class lost up to 80% of their wealth, bottom barely noticed as circulation speed was almost infinite).

Aug 14, 2014 - 5:17am

Trader Dan

Sorry for off topic.

I occasionally visit Trader Dan's site as a source of an alternative opinion. I have never before posted a comment but I recently disagreed with his view that changes to the inventory of GLD are a direct reflection of "Western investment demand". So I posted a comment and reasoned that his view was not NECESSARILY correct. I gave an example. Supposing JPM needed to find several hundred tons of Gold, for instance to ship to China, as an AP it could buy GLD shares and then, in units of 100K shares, withdraw the Gold from GLD. That would reduce the GLD inventory and reduce the GLD share float, but the remaining shares would still be priced in direct relation to the market price of Gold. BUT the reduction in GLD inventory would in no way be a reflection of reduced Western demand for Gold but rather an increase in Asian demand for Gold.

I expressed this view politely in a factual and well-reasoned way and yet I, and those who agreed with my view, received an abusive response from Dan, which is totally unnecessary. I genuinely believe that Dan, like many, does NOT understand the way GLD works. He is, of course, entitled to his own opinions, which he could express politely and backed-up by facts, but NOT his own facts.

So this was my first, and last, experience dealing with the almighty Trader Dan. To those here who know him better, I pose a simple question: Has he always been such an arrogant prick??

Spartacus Rex
Aug 14, 2014 - 5:22am

@ ivars

1) Do you comprehend the difference between an actual U.S. Dollar, and a counterfeited piece of Bankster paper purporting to be a genuine obligation, "Bill" or Note for same?

2) Can you correctly identify all of the international Parties which actually own the "Federal" Reserveless Bank?

3) Can you correctly identify the international Parties which bankrolled the Communists' takeover in Russia as well as China, and currently own the counterfeiting Central Banks of Same?

4) Can you correctly identify the reason why ALL U.S. Debt incurred since the creation of the Phederal Reserve is Null and Void, and why ever since 23 July 1965, ALL U.S. Treasury Bills, Notes and Bonds are not worth even the paper that they are printed on?

Cheers, S. Rex

Spartacus Rex
Aug 14, 2014 - 5:27am

@ phillipat You Ought To Know Better...

Dan Norcini is a Trader, thus his livelihood is totally based in Fiat or else he Starves! Ergo the built in Cognitive Dissonance

Cheers, S. Rex

philipat Spartacus Rex
Aug 14, 2014 - 5:37am


Yeah, I guess so. But a Trader who is basing TRADING decisions on flawed assumptions risks losing a lot of fiat?? It would be nice to see him get wiped out in a Gold rally. Couldn't happen to a nicer Guy!!

Spartacus Rex
Aug 14, 2014 - 5:38am
Aug 14, 2014 - 5:39am


I do not get the point. What has happened has happened and now the question is what will happen in real politics not lawyers office.

And what will happen will also be illegal from many points of view but life writes laws for itself. Or, rather, the strong write the rules which fit their aims.

Aug 14, 2014 - 5:43am

Ok so Putin decided ( since

Ok so Putin decided ( since beginning i am sure) to push the convoy through the border area Ukraine does not control at the same time he will be delivering speech in Crimea to Duma and ministers. Good timing.


More than 100 lorries carrying Russian aid have set off towards the border with Ukraine, amid continuing confusion over their final destination.

The lorries appeared to be heading towards Rostov, the Russian city near rebel-held areas of eastern Ukraine.

A senior International Red Cross (ICRC) official, Laurent Corbaz, is heading for Kiev and then Moscow to discuss the Russian aid initiative.

The ICRC says Ukraine and Russia need to clarify border crossing procedures.

Russia has dismissed claims that the convoy is a pretext to send military supplies to the rebels as "absurd".

But Ukraine has said the convoy must be inspected by international monitors before it can be let in.

The BBC's Steve Rosenberg is following the convoy's progress and tweeted that military vehicles are escorting the big white lorries on the highway to Rostov.

Spartacus Rex
Aug 14, 2014 - 5:52am

@ ivars LMAO "illegal"

Apparently the "point" then is above your pay grade Ivars?

As well you seemingly believe that anything "written" thereby becomes actual "Law", or that the mere .001% are better Armed and have more "boots on the ground" to fulfill their aims, then those who have been through actual combat and are willing to fight for more than a mere paycheck denominated in counterfeited fiat paper IOUs.

“If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen.” ― Samuel Adams

Cheers, S. Rex

Spartacus Rex
Aug 14, 2014 - 5:56am

@ ivars "OK so Putin('s Masters) decided"...

Let's get this Dog & Pony Show rolling...

ALL Wars are Banksters' Wars!

Cheers, S. Rex

Aug 14, 2014 - 8:22am

Obama loses again

The don't make stupid mistakes Obama foreign policy doctrine was written because all they do is make stupid mistakes:

The war in Ukraine is a stupid man's war which the west can't win. The more the west tries to control the Ukraine the more impoverished the people are becoming and the more foolish Obama looks in the eyes of the world including Europe. Does anyone really believe that the Europeans are going to choose America from which they get nothing instead of Russia from which they get natural gas? Billions in trade? And responsible leadership?

The war in Iraq is another stupid man's war which the west can't win. I thought the American's tried this strategy a couple times before of 'overpowering' these people with military technology and CIA advisors. How is this time going to work out better than the last times? Further, this time we have given our ISIS enemies all the weapons and money they need to fight us in advance. Brilliant strategy played out for the world to watch

The Israeli war . Another brilliant piece of strategy by Obama's boyz. We 'sell' Israel all these weopons to 'level' Gaza while declaring we want the violence to stop.

The list goes on...we are attempting to 'control' every facet of the markets , we are now attempting to 'control' our own angry people with threats and intimidation, we attempt to control our press, we attempt to control what we can say to one another, we attempt to control what everyone in the world says and does..

I think that the world is going to win this battle against 'us' much sooner than most imagine.

Sound Money Minnow
Aug 14, 2014 - 8:27am

@ ivars LMAO "illegal"

Exactly SRex. There arent't too many of those.001 percenters serving in the military. One day a leader will arise with dignity and honor, not self interest, and preservation. Missed posting recently due to surgery. Good to see you are still fighting the good fight my brother.

Aug 14, 2014 - 9:22am

Mkts so predicitble during an OEX week.

Sure it's coincidence today the silver fix ends with no disturbance to S&P/Dow thurs expiration. The important indexes; the nasdog follows in X FRYday. What happens from here only the deep dastardly elitists golbal insider banksters know; with some need to know info passed along to gov goon platooning thugs of high puppetry status. Keep a death grip on your physical stack as the USS finanical titanic finds another iceberg to crash into this Fall. All the growns of the imploding, sinking, mark to fantasy fiat financial empire may last another year. Layed out in the morgue, measured for a coffin, and rigorous impulsive fried nerves spasmotically flashing some haunting mark to fantasy of possible life; not even a dead empire walking. The reality of rotting, decaying financial fiat paper assets will only be highlighted by the rush to assets of substance, should any be there to be found when the masses awake. The towering inferno of paper assets burning so white hot, as to vaporize all who possess them.

Aug 14, 2014 - 9:34am

I Guess I'm Having a Tough Morning

But I need to get it out. I'm reading all the posts about war and what's happening in Ukraine and all the excited posts of fear and war.

The convey is heading to Ukraine, big bloody deal. Don't you think it may just be a tactic for the Russians to bring in weapons in elsewhere while the populace is centered on the convoy. Hell the Russian backed so called militants control a lot of the border, why would they need to smuggle weapons in on a convoy. (Give me a break)

As a wounded Viet Nam Vet (Regular Army) and long time National Guard, I'm tired of bloody war and seen enough of it. I want Peace and Demand Peace even within myself which has been promised to me by a Power Greater than Myself.,

Not once have I read on these threads that anyone is Praying for war Not to Happen (I may have missed it) or are Against It. I just hate seeing a lot of hype disguised as fear to raise the PM prices. Hell prices are going up anyway even if Putin and the rest of the Elites kiss each others arses and make up.

Anyway rant over and yes I believe the shit is coming and that's why I'm preparing and Stacking Everything including my Faith..

Bye the way folks the Elites make great Diversions happen for their own benefit.

ivars Spartacus Rex
Aug 14, 2014 - 9:40am

Definitely above my

Definitely above my paygrade. Cheers!

DeaconBenjamin Marchas45
Aug 14, 2014 - 1:21pm

Praying for war Not to Happen

FWIW, for the past few weeks I have been praying for Christians on both sides to have the peace that passes all understanding, to have the perfect love that casts out all fear, and to place their allegiance to Christ before any other allegiance; forgiving and seeking to minister as peacemakers; that those who have lost homes and family members would draw that much closer to Christ, and find in Him the future, the hope, the calling, and the riches in Christ that they cannot find in the world; that Christians would refuse to take or receive anything taken from people on the other side, whichever side it may be; that the religious and political leaders on both sides who love Christ would take a bold stand for peace and an end to violence, that those leaders who do not know Christ would come to know Him and seek peace; and that those leaders on both sides who inflame and extol violence -- of whatever country -- would have their power broken, would be exposed, despised and ridiculed.

Aug 14, 2014 - 3:31pm

You'd think they'd realize

Dead folk don't buy much, and they're not repeat customers.

Aug 14, 2014 - 3:43pm

check this tweet

From the Moscow correspondent for The Guardian UK:

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Key Economic Events Week of 2/11

2/12 12:45 ET GCP speaks
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2/5 8:30 ET Trade Balance
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1/29 10:00 ET Consumer Confidence
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