Retail Central Bank Digital Currencies - The Race for the Future of Money

In a recent Payments System Research Briefing, the braintrust at the Federal Reserve Bank of Kansas looks at the case of retail central bank digital currencies (CBDCs). 

 

Let's open by looking at the two types of CBDCs:

 

1.) Retail (or general purpose) CBDCs - these CBDCs will take on the attributes of physical cash and will be used by consumers and businesses.  This can be thought of most easily as a "cashless" system.

 

2.) Wholesale CBDCs - these CBDCs will be used by financial institutions and are intended for the settlement of interbank transfers and could reduce counterparts credit and liquidity risks.

  

The authors note that, while many central banks are exploring the use of retail CBDCs, only a few have actually taken the steps necessary to implement a retail CBDC as shown on this table:

 

 

In the briefing, the authors look at the motivations for issuing retail CBDCs.  They note that central banks in emerging and developing economies EMDE) are far more enthusiastic about issuing retail CBDCs compared to their counterparts in advanced economies.  Let's look at the motivations for each grouping of nations:

 

1.) Emerging and Developing Economies (EMDE) - promoting financial inclusion, enhancing payment system efficiency, competition, competition, security and/or resiliency, improving cross-border payments.

 

In these economies, many consumers have little access to financial services and, as such, rely heavily on cash payments in preference to less-developed electronic payment systems.  This results in higher operational costs which would be moderated once the dead for physical cash is reduced.  Access to the banking system (i.e. inclusion) seems to be all important to central bankers.  For example, in these less developed economies, many individuals are unbanked with about 60 percent of adults being unbanked in Mexico and Nigeria and 20 percent of adults being unbanked in China, India, Jamaica and the Bahamas.  The Central Bank of The Bahamas has taken the step of issuing a physical CBDC payment card to unbanked individuals that have no access to a smartphone or computer.  The authors state that a Retail CBDC may increase competition and result in lower transaction costs for both merchants and consumers.

 

2.) Advanced Economies - payment access, resiliency and competition.  

 

While no advanced economy has introduced a retail CBDC, this may reflect the limited potential to improve national payment systems.  Interestingly (and I might add ironically), Sweden's central bank claims that the priority policy goal of the "e-krona" is to ensure broad access to payments for those that will be adversely impacted by the move to a cashless society.  Central banks in Canada, Japan and Norway have stated that there is currently little motivation to move to a retail CBDC ecosystem, however, should the use of cash decline to the point where it can no longer be used in a wide range of translations or should a private cryptocurrency make significant inroads, these central banks could change their views and move toward a retail CBDC.  This is quite interesting given that over half of retailers in Sweden expect to stop accepting cash for payments by 2025 and the use of banknotes in the United Kingdom has fallen from 60 percent of payments by volume in 2008 to 28 percent 2018 and is expected to fall to just 9 percent of payments by 2028 so it looks like central bankers concerns about a decline in the use of cash has already provided them with the reason that they need to foist CBDCs on the globe's advanced economies.

  

In closing, here is the conclusion to the briefing with my bold:

 

"Several EMDEs have implemented CBDCs primarily to promote financial inclusion and improve their payments systems. Several advanced economies have made significant progress in assessing the case for a retail CBDC; though a few have identified motivations for implementing a CBDC, most have not found a compelling case to do so.

 

Many other central banks are still at an early stage in exploring motivations for a retail CBDC, including the Federal Reserve, which recently published a report aiming to foster a public discussion with CBDC stakeholders on the potential benefits and risks of CBDCs (Board of Governors of the Federal Reserve System 2022). Through research and public dialogue, these central banks may increasingly identify motivations for a retail CBDC or scenarios in which a retail CBDC may be warranted. The motivations and scenarios will likely vary across countries, as each country has a unique set of opportunities and challenges in its economy and payment system."

 

Let's close with this graphic showing the "race for the future of money:":

 

...and these graphics showing the rapid change in CBDC research and development since April 2021:

 

 

Given the changes in the global economy over the past few years, the advanced in blockchain technology, the moves toward a digital identity and the widespread growth of the surveillance state, in my opinion, the imposition of a central bank digital currency ecosystem is a given and that, with the majority of the world's central banks exploring the use of CBDCs, this is likely to be our "new normal" within the next five years.

China and the Five Eyes Alliance

While many people are unaware of its existence, an intelligence alliance formed in 1946, was created between five anglophone nations and their security agencies.  The partnership includes:

 

1.) the United States and the National Security Administration (NSA)

 

2.) the United Kingdom and Government Communications Headquarters (GCHQ)

 

3.) Canada and Communications Security Establishment (CSEC)

 

4.) Australia and Australian Signals Directorate (ASD)

 

5.) New Zealand and Government Communications Security Bureau (GCSB)

  

Through a lengthy series of intricate and secret bilateral agreements, the Five Eyes partners conduct the interception, collection, acquisition, analysis and decryption activities, sharing the intelligence data obtained with their partner nations by default.  The secretive arrangements allow for unlawful intrusions on the right to privacy of the citizens of these five nations.  Here is a quote about Five Eyes' data sharing from Privacy International:

 

"It has been believed for some time that much of the intelligence produced by the Five Eyes can be accessed by any of the partner states at any time. As early as the 1980’s, ECHELON, a “global Internet-like communication network,” allowed Five Eyes analysts to “task computers at each collection site, and receive the results” on civil satellite communications.

 

It is likely that the Five Eyes agencies have adopted common approaches to collection and similar interfaces as means of making intelligence co-operation and sharing more expedient. Yet agencies in different member states operate under disparate systems of laws and practice, making some effort to harmonize such standards beneficial given the functional integration and co-operation across the Five Eyes."

 

Thanks to revelations by Edward Snowden, we now know that Five Eyes have integrated programs, staff, bases and analysis and that the information that they glean is shared with all partners.

 

In March 2020, Five Eyes member states agreed to expand its role away from security and intelligence to a stance that weighed in on human rights and democracy, focussing on online child sexual exploitation and abuse as shown on this statement from March 2022:

According to a press release from the United States Department of Defense regarding a Five Eyes meeting held in October 2020, we find that the Five Eyes is focussing on security challenges, most particularly those in the Indo-Pacific region (i.e. China, particularly given its strained relationship with Five Eyes' member Australia):

 

Now, let's see how China fits into the Five Eyes agenda.  China has been following Five Eyes and its newly expanded role as shown in this quote from the Global Times dated December 22, 2020 with bolds throughout this posting being mine:

  

"Amid strained China-Australia relations, Five Eyes nations are reportedly in preliminary discussions on how to respond to China's actions with one source describing cooperation within the alliance as "off the charts at the moment", NewsCorp reported. That means they may coordinate to impose restrictions on China. As a matter of fact, due to the hegemonic status and great influence of the US in world affairs, the Five Eyes alliance has become a tool for the US to maintain its dominant position. The US has long viewed China as a major strategic threat, and it is not surprising that it would lead the Five Eyes alliance to take collective actions against China for a variety of reasons. 

 

Take ideological differences, for example. The US and other Five Eyes countries are typical Western countries with democratic political systems, and they harbor widespread bias against Chinese socialist ideological values. The Five Eyes countries subconsciously view China with a Cold War and zero-sum game mentality. On the basis of ideology, these countries highlight their identity as democratic and free countries by cooperating to counter "Communist China.

 

The idea to build the Five Eyes alliance into a new anti-China axis is a wishful thinking. It will only encounter harsh realities. "

 

Recent opinion pieces and news items in Global Times continue to convey China's views on Five Eyes as shown here:

 

...and quoted here:

 

"The alliance has been behind issues including the origins-tracing of COVID-19, issues related to China's Xinjiang and Hong Kong, and the South China Sea. The Five Eyes has moved from a secret espionage and intelligence organization in the past to a coalition that becomes more and more China-phobic, and resorts to more and more abominable methods....

 

In recent years, in order to meet Washington's strategic needs to suppress China, the Five Eyes alliance has once again used the so-called China threat to prolong its existence, and has gradually transformed from an intelligence-sharing mechanism to an "information command" dedicated to anti-China policy coordination....

 

An organization that should have hidden only in the dark and used disgraceful means to "contain its opponents" suddenly began to act ostentatiously by simply relying on anti-China propaganda. For example, intelligence agencies in Australia and other countries frequently approach and harass the Chinese communities in those countries, coercing them to become informants for the Five Eyes. The consulates of the Five Eyes member countries stationed in Hong Kong have almost become the "commander-in-chief of interference and subversion." The alliance, in the name of "protecting national security," also smears and attacks high-tech companies in other countries, especially China, without any evidence.... (think Huawei)

 

As a matter of fact, the Five Eyes has become a "gangster group" with obvious racism. Its hostility and anxiety toward China come from its deep-rooted values of white supremacy and racial discrimination, and it is unwilling to see Chinese people's lives getting increasingly better.

 

Nominally, the five countries share intelligence, but the truth is that the four eyes rely on and take orders from the "one eye" - the US. Even Western media have to admit that most of the intelligence shared within the Five Eyes alliance comes from Washington....

 

Being good at creating "imaginary enemies" has always been an inherent feature of the US' strategy, but the US' decision-making and intelligence departments have become increasingly paranoid in implementing the strategy of "creating enemies." The way the US government has been conducting diplomacy in recent years is more and more like the way an intelligent agency or the CIA does. US intelligence departments provide decision-making departments with analysis that distorts the truth and meets specific political needs, and decision-making departments follow these highly hostile playbooks to handle related diplomatic issues."

 

....and here:

 

...and quoted here

 

"When asked about the Global Times' exclusive report on the Five Eyes Alliance which is fabricating evidence that intends to show China is "infiltrating politically into Western countries," Chinese Foreign Ministry spokesperson Wang Wenbin said at a press conference on Tuesday that China demands an explanation from relevant countries. 

 

In terms of political infiltration, Western countries such as the US have considerable expertise in practicing it, Wang noted. 

 

In the name of "freedom and democracy," the US instigated "color revolutions" in Eastern Europe, Central Asia, the Middle East, Latin America and other places to create regional turbulence to achieve its own geopolitical goals, Wang said...

 

Politicians in the US, the UK, and other countries are in collusion with secessionists in China's Hong Kong Special Administrative Region. Acting as a pawn and white glove of the US government, the National Endowment for Democracy has repeatedly interfered in Hong Kong's affairs, attempting to turn the city into a bridgehead for subversion and infiltration, Wang added. 

 

The fact that the US and the UK are interfering and infiltrating into China, while distorting facts and blaming China instead, reveals their deep-rooted Cold War mentality and ideological bias, Wang said. 

 

In the name of "anti-infiltration," relevant countries have carried out political persecution against persons engaged in normal exchanges and cooperation with China, to create a chilling effect and to bring McCarthyism back to life, which has not only seriously damaged the bilateral relations between these countries and China, but also encouraged racial discrimination and hateful words and deeds in these countries, Wang noted." 

 

As you can see from China's views on Five Eyes, China looks at the world through its own cultural filter which is far different from Western culture.  In large part, China's current role as a global superpower was created by the Clinton Administration which insisted that the future health of global trade relied on China's accession to the World Trade Organization in December 2001.   This move eventually resulted in a China that has the world by the "short and curlies" with the deindustrialized West being very heavily reliant on Chinese goods just as Europe is very heavily reliant on Russia's hydrocarbon reserves and the remainder of the West is reliant on Russia's massive inventory of non-hydrocarbon natural resources.  Both China and Russia play the long game; they can be patient and wait as the West slowly but surely loses its place of global prominence.  Such is not the case for the West and their waning influence on global geopolitics.

 

Partitioning Russia - Washington's Plans for Russia's Future

The political leaders of the most influential Western nations are delighted with the prospect that their actions against Russia may be the catalyst needed to rid the world of Vladimir Putin.  As you will see in this posting, merely ridding the world of the 21st century's version of Adolph Hitler (their words, not mine) isn't enough for the power hungry ruling class.

 

As usual, let's open this posting with some background information to help you put everything into context.  The Commission on Security and Cooperation in Europe (CSSE), also known as the U.S. Helsinki Commission is an "independent commission of the United States federal government".  The Helsinki Commission was established under Public Law 94-304 of June 3, 1976 by Congress.  Here are the Commission's function and duties:

 

"The Commission is authorized and directed to monitor the acts of the signatories which reflect compliance with or violation of the articles of the Final Act of the Conference on Security and Cooperation in Europe, with particular regard to the provisions relating to human rights and Cooperation in Humanitarian Fields. The Commission is further authorized and directed to monitor and encourage the development of programs and activities of the United States Government and private organizations with a view toward taking advantage of the provisions of the Final Act to expand East-West economic cooperation and a greater interchange of people and ideas between East and West."

 

The Commission has 21 members as follows:

 

(1) Nine Members of the House of Representatives appointed by the Speaker of the House of Representatives. Five Members shall be selected from the majority party and four Members shall be selected, after consultation with the minority leader of the House, from the minority party.

 

(2) Nine Members of the Senate appointed by the President of the Senate. Five Members shall be selected from the majority party of the Senate, after consultation with the majority leader, and four Members shall be selected, after consultation with the minority leader of the Senate, from the minority party.

 

(3) One member of the Department of State appointed by the President of the United States.

 

(4) One member of the Department of Defense appointed by the President of the United States.

 

(5) One member of the Department of Commerce appointed by the President of the United States.

 

(b) Commission Chairman and Cochairman

 

Here's what the CSSE has to say about itself:

 

"Defining security in a uniquely comprehensive manner, the Final Act contains 10 principles guiding inter-state relations, among them respect for human rights and fundamental freedoms. The Commission was founded to strengthen the legitimacy of human rights monitoring; to defend those persecuted for acting on their rights and freedoms; to ensure that violations of Helsinki provisions were given full consideration in U.S. foreign policy; and to gain international acceptance of human rights violations as a legitimate subject for one country to raise with another." 

 

While promoting human rights and freedoms was part of its original mandate, the end of the Cold War allowed the following with my bolds:

 

"...the expansion of commitments to new areas, such as free and fair elections and the rule of law, while regional conflicts have required intense focus on more robust U.S. and international policy responses to serious violations of a broader range of Helsinki principles, such as territorial integrity and sovereignty. Challenges common to most participating States also gained more prominence in Commission work, such as trafficking in persons, manifestations of anti-Semitism, and the treatment of Roma as well as new or other growing minorities in Europe.  The Commission has also increased activity in the other fields, such as promoting energy security, protecting the environment and combating corruption through economic transparency, as well as dealing with weapons proliferation, supporting conflict resolution initiatives and combating terrorism....

 

...the Commission pays particular attention to those where severe and persistent violations of human rights and democratic norms occur.  In practice, this has traditionally meant a focus on Russia and the countries of Eastern and Central Europe, the Caucasus and Central Asia, which had been ruled as one-party, communist states or were a part of such a state, and have subsequently undergone political transition with varying degrees of success and completion.  Improvements in a number of countries have allowed the Commission to shift more attention to shortcomings and setbacks in the records of other countries, including long-standing democracies like the United States and in Western Europe."

 

The CSSE's mandate covers all participating Organization for Security and Co-operation in Europe (OSCE) members which include the following 57 States:

 

Basically, as you can see, the CSSE is just another arm of Washington's "swamp".

 

Now, with that in mind, let's look at the raison d'etre behind this posting.  This announcement recently appeared on the CSSE website: 

 

Here is a quote from the webpage announcing the meeting with my bolds:

 

"Russia’s barbaric war on Ukraine—and before that on Syria, Libya, Georgia, and Chechnya—has exposed the Russian Federation’s viciously imperial character to the entire world. Its aggression also is catalyzing a long-overdue conversation about Russia’s interior empire, given Moscow’s dominion over many indigenous non-Russian nations, and the brutal extent to which the Kremlin has taken to suppress their national self-expression and self-determination.

 

Serious and controversial discussions are now underway about reckoning with Russia’s fundamental imperialism and the need to “decolonize” Russia for it to become a viable stakeholder in European security and stability. As the successor to the Soviet Union, which cloaked its colonial agenda in anti-imperial and anti-capitalist nomenclature, Russia has yet to attract appropriate scrutiny for its consistent and oftentimes brutal imperial tendencies."

In this case, it takes brutality to understand brutality.

 

Here is a video showing the entire online briefing should you have the patience to watch an hour and half of sheer bulls@it:

 

Don't you find it fascinating that the CSSE is pointing the finger at Russia over its actions in both Syria and Libya given that the United States was heavily involved in both actions and was most definitely NOT invited to participate in Syria's civil war, unlike Russia.  As well, calling Russia an "imperialist" nation is so ironic as to be laughable given Washington's post-World War II history of violently overthrowing democratically elected leaders of other nations and replacing them with their preferred leaders (i.e. Iran and Mohammed Mosaddegh and the Shah of Iran as just one example).

 

Here are three examples of how a "post-colonial" Russia might look if Washington gets its way:

 

So much for spreading "freedom and democracy" around the globe.  Washington won't be happy until Russia is torn asunder and ends up a subset of its present geographic reality.  Regime change (i.e. getting rid of Putin) is no longer enough for Washington's swamp denizens.   One thing that they seem to be forgetting is that if there is any nation that is experiencing internal divisions that could result in the redrawing of its borders is this one which is already "pre-divided":

 

 

What Washington's denizens seem to be unable to grasp is the concept that Russians are just as proud of Russia (and Vladimir Putin and his 80 plus percent approval rating for that matter) as Americans are of the United States and they are hardly likely to warmly accept the idea that the West wants to see them divided and then conquered.

Canada's COVID-19 Antibody Survey

During the pandemic, it has been a race among nations to see which can impose the most draconian measures on their unwitting citizens.  Among the top ten finishers in the advanced economy classification throughout the past two years has been Canada, Australia and New Zealand.  A recent development in Canada takes government overreach to a whole new level.

 

Let's open by looking at some background information on Statistics Canada (aka StatsCan), the Canadian government agency responsible for the accumulation of national statistics.  Under Canada's Statistics Act, the Chief Statistician of Canada has the right to determine whether a request for information from the public is mandatory or voluntary under Section 8 (1) of the Act.  For example, participation in the census of population and labour force participation are all mandatory.  

 

Back in March 2022, Statistics Canada announced the following survey:

 

The study consists of two parts as follows:

 

“The first part of the survey is an electronic questionnaire about general health, chronic conditions and symptoms, access to care and exposure to COVID-19. The questionnaire must be completed prior to moving on to the second part as it is necessary to collect your personal information so we can send the results to you, and to obtain your written consent to complete the second part. 

 

The second part is an at-home finger-prick blood test which you will administer to yourself as soon as possible after completing the electronic questionnaire. You will then return the dried blood spot sample using the enclosed prepaid package.  The lab will analyze the sample to determine the presence of COVID-19 antibodies.”

 

Fortunately for Canadians, in this case, participation in the survey is voluntary.  As part of the survey, Canadians who participate will have to provide Statistics Canada with their provincial health card number to help link their antibody data with personal health information that provincial health departments, health registries and other health organizations already have on file.  In other words, participants are potentially releasing all of their most personal health information to Canada's federal government which normally does not have access to provincial health records.

 

Canadians were randomly selected to participate in the survey and must provide consent as follows:

 

“While completing the electronic questionnaire, you will be asked for consent to:

 

1.) provide the dried blood spot sample

 

2.) receive your test results

 

3.) store your sample in a biobank

 

4.) share certain data with provincial and territorial ministries of health, Health Canada and the Public Health Agency of Canada and potentially McGill University.

 

By consenting, you confirm that:

 

you understand that even though you have agreed to some or all of the items above, you can still withdraw from any part of this survey or subsequent studies at any time

you understand what is involved in taking part in the survey."

 

Participants are also consenting to store the dried blood spot samples after antibody testing is complete.  These samples will be stored anonymously at the Statistics Canada biobank located at the Public Health Agency of Canada's National Microbiology Laboratories in Winnipeg.  It is important for participants to note the following:

 

"The samples will be used for future health research projects. Only researchers who submit projects that meet the strict conditions imposed by Statistics Canada, in particular those relating to confidentiality, will have access to these samples."

 

Here's a further quote on what consenting means in this survey:

 

“You will also be asked if you consent to sharing the information you provide with Health Canada, the Public Health Agency of Canada, and provincial and territorial ministries of health (including l'Institut de la statistique du Québec for Quebec residents). Sharing data allows researchers to fully utilize the information we collect to improve health policies and, in turn, the health of Canadians. If you consent, your data will be shared under the following conditions:

 

Your name, address, telephone number and health card number could be shared.

The Institut de la statistique du Québec and provincial and territorial ministries of health may make this data available to local health authorities. Local health authorities will not receive any personal identifiers, only your postal code.

Your information will not be shared with any other party without your consent.

Health Canada and the Public Health Agency of Canada, and the ministries of health will use this information only for statistical and research purposes.

To avoid duplication of surveys, Statistics Canada might sign agreements to share the data from this survey with McGill University. McGill is the legal entity representing the COVID-19 Immunity Task Force (CITF). The CITF is a group of scientists and experts who use data to support decision-makers in their efforts to protect Canadians and minimize the impact of the COVID-19 pandemic.

 

With your consent, your survey responses and postal code will be shared with McGill and the CITF. Names, addresses, telephone numbers, email addresses and health card numbers will not be shared."

 

The website goes on in great detail on how to voluntarily donate your body tissues to the Trudeau government:

 

 

While some may think that my tinfoil hat is a bit tight today, I'm not particularly fond of supplying my DNA to any government anywhere and at anytime  What is particularly galling about this survey is that tests for SARS-CoV-2 antibodies were not considered as a justified reason for not accepting Canada's more-or-less mandatory COVID-19 vaccines which were required for employment and travel by train or airplane for example.  Now, all of a sudden, the Trudeau government is interested in how many Canadians have these antibodies and linking their presence to vaccination status.  Isn't that an interesting turn of events?  And, as far as privacy goes, we all know that the Canadian government has a poor track record when it comes to protecting Canadians’ confidential information as shown here:

 

 

In closing, ask yourself two questions:

 

1.) Would you trust the government with your body tissues?

 

2.) Should you trust the government with your body tissues?

 

Given that Canada's government froze the bank accounts and other financial instruments of Canadians who disagreed with their vaccine mandates, I really don't think that they can be trusted with any of our most personal information.

Vladimir Putin and the End of the Obsolete Unipolar Order

At the recent St. Petersburg International Economic Forum, Russia's President Vladimir Putin or his body double as shown here and here:

 

...and here:

...has provided the world with some interesting insight on Russia's current view of the global geopolitical reality at the event's plenary session.  Let's look at some quotes as provided by the Kremlin's English language website.

 

Putin opens with this about the timing of the Forum noting that all bolds throughout are mine:

 

"It is taking place at a difficult time for the international community when the economy, markets and the very principles of the global economic system have taken a blow. Many trade, industrial and logistics chains, which were dislocated by the pandemic, have been subjected to new tests. Moreover, such fundamental business notions as business reputation, the inviolability of property and trust in global currencies have been seriously damaged. Regrettably, they have been undermined by our Western partners, who have done this deliberately, for the sake of their ambitions and in order to preserve obsolete geopolitical illusions.

 

Today, our – when I say “our,” I mean the Russian leadership – our own view of the global economic situation. I would like to speak in greater depth about the actions Russia is taking in these conditions and how it plans to develop in these dynamically changing circumstances."

 

He goes on to refer to his virtual appearance at the 2021 edition of the World Economic Forum's Davos clusterf@ck, reiterating his view of the new global reality and the passing of the old, American-dominated unipolar order, may it rest in peace:

 

"When I spoke at the Davos Forum a year and a half ago, I also stressed that the era of a unipolar world order has come to an end. I want to start with this, as there is no way around it. This era has ended despite all the attempts to maintain and preserve it at all costs. Change is a natural process of history, as it is difficult to reconcile the diversity of civilisations and the richness of cultures on the planet with political, economic or other stereotypes – these do not work here, they are imposed by one centre in a rough and no-compromise manner. 

 

The flaw is in the concept itself, as the concept says there is one, albeit strong, power with a limited circle of close allies, or, as they say, countries with granted access, and all business practices and international relations, when it is convenient, are interpreted solely in the interests of this power. They essentially work in one direction in a zero-sum game. A world built on a doctrine of this kind is definitely unstable."

 

This is one of the most interesting parts of Putin's speech which puts Washington's belief in itself as the leader of the rules based international order:

 

"After declaring victory in the Cold War, the United States proclaimed itself to be God’s messenger on Earth, without any obligations and only interests which were declared sacred. They seem to ignore the fact that in the past decades, new powerful and increasingly assertive centres have been formed. Each of them develops its own political system and public institutions according to its own model of economic growth and, naturally, has the right to protect them and to secure national sovereignty."

 

Here is the new reality and how the West has responded to the rise of competitor states:

 

"...the ruling elite of some Western states seem to be harbouring this kind of illusions. They refuse to notice obvious things, stubbornly clinging to the shadows of the past. For example, they seem to believe that the dominance of the West in global politics and the economy is an unchanging, eternal value. Nothing lasts forever.

 

Our colleagues are not just denying reality. More than that; they are trying to reverse the course of history. They seem to think in terms of the past century. They are still influenced by their own misconceptions about countries outside the so-called “golden billion”: they consider everything a backwater, or their backyard. They still treat them like colonies, and the people living there, like second-class people, because they consider themselves exceptional. If they are exceptional, that means everyone else is second rate.

 

Thereby, the irrepressible urge to punish, to economically crush anyone who does not fit with the mainstream, does not want to blindly obey. Moreover, they crudely and shamelessly impose their ethics, their views on culture and ideas about history, sometimes questioning the sovereignty and integrity of states, and threatening their very existence. Suffice it to recall what happened in Yugoslavia, Syria, Libya and Iraq."

 

Putin goes on to specifically discuss the impact of the new global reality on Russia and Russians:

 

"If some “rebel” state cannot be suppressed or pacified, they try to isolate that state, or “cancel” it, to use their modern term. Everything goes, even sports, the Olympics, bans on culture and art masterpieces just because their creators come from the “wrong” country.

 

This is the nature of the current round of Russophobia in the West, and the insane sanctions against Russia. They are crazy and, I would say, thoughtless. They are unprecedented in the number of them or the pace the West churns them out at.

 

The idea was clear as day – they expected to suddenly and violently crush the Russian economy, to hit Russia’s industry, finance, and people's living standards by destroying business chains, forcibly recalling Western companies from the Russian market, and freezing Russian assets.

 

This did not work. Obviously, it did not work out; it did not happen. Russian entrepreneurs and authorities have acted in a collected and professional manner, and Russians have shown solidarity and responsibility....

 

The dire forecasts for the prospects of the Russian economy, which were made in early spring, have not materialised. It is clear why this propaganda campaign was fuelled and all the predictions of the dollar at 200 rubles and the collapse of our economy were made. This was and remains an instrument in an information struggle and a factor of psychological influence on Russian society and domestic business circles."

 

Here are his thoughts on how the anti-Putin/anti-Russia sanctions have turned out for Europe and the United States:

 

"Once again, the economic blitzkrieg against Russia was doomed to fail from the beginning. Sanctions as a weapon have proved in recent years to be a double-edged sword damaging their advocates and architects just a much, if not more. 

 

I am not talking about the repercussions we see clearly today. We know that European leaders informally, so to say, furtively, discuss the very concerning possibility of sanctions being levelled not at Russia, but at any undesirable nation, and ultimately anyone including the EU and European companies. 

 

So far this is not the case, but European politicians have already dealt their economies a serious blow all by themselves. We see social and economic problems worsening in Europe, and in the US as well, food, electricity and fuel prices rising, with quality of life in Europe falling and companies losing their market edge.

 

According to experts, the EU’s direct, calculable losses from the sanctions fever could exceed $400 billion this year. This is the price of the decisions that are far removed from reality and contradict common sense.

 

These outlays fall directly on the shoulders of people and companies in the EU. The inflation rate in some Eurozone countries has exceeded 20 percent. I mentioned inflation in Russia, but the Eurozone countries are not conducting special military operations, yet the inflation rate in some of them has reached 20 percent. Inflation in the United States is also unacceptable, the highest in the past 40 years.

 

This is our main difference from the EU countries, where rising inflation is directly reducing the real incomes of the people and eating up their savings, and the current manifestations of the crisis are affecting, above all, low-income groups.

 

The growing outlays of European companies and the loss of the Russian market will have lasting negative effects. The obvious result of this will be the loss of global competitiveness and a system-wide decline in the European economies’ pace of growth for years to come. 

 

Taken together, this will aggravate the deep-seated problems of European societies. ...A direct result of the European politicians’ actions and events this year will be the further growth of inequality in these countries, which will, in turn, split their societies still more, and the point at issue is not only the well-being but also the value orientation of various groups in these societies."

 

Let's close with this chart showing how Russia's ruble, which was supposed to collapse under the punishing sanctions has actually performed very well compared to the U.S. dollar:

 

...and the euro:

 

 

Here is a chart showing the rising price of Urals crude oil, Russia's major export oil brand (a mixture of heavy and high grade oil from the Urals and Volga with Western Siberian light oil):

 

...and here is a chart showing the price of Russian natural gas in U.S. dollars:

 

 

Lastly, here is a chart showing Putin's approval/disapproval rating among Russians:

 

...and a chart showing Joe Biden's approval/disapproval rating for comparison:

 

 

So, who is laughing now?

 

While the West loves to vilify Putin and claim that he is the new Hitler, in fact, Russia is doing very well under the current toothless sanctions regime and is quite pragmatic about its new role (and that of China) in the multipolar geopolitical reality.