The Financial War Games Happening Now


My my. For all the constant debate around the US budget, they never seem to be short of funds when it comes to foreign policy.

The undeclared war on Russia continues.

The Wall Street Journal reports that the US Navy is giving vessels to Ukraine[1] (located on Russia’s southern border) and helping construct a maritime operations centre near Odessa.

They might even throw in some lethal weapons.

There are advantages to being a US lapdog. Ukraine defaulted on a US$3 billion loan it owed Russia in 2015.

The IMF changed its lending rules to allow it to keep supporting Ukraine anyway. 

Too bad the same couldn’t happen for Greece.

That’s not all…

US Navy ships are also patrolling the Black Sea.

NATO is also ‘preparing a package of measures to strengthen its posture’.

While Western media likes to present Russia as the threat, it’s actually the EU and America mustering firepower on Russia’s western border[2].

Will this make you money? Probably not. But it does put the news and history into some context.

For example, the massive pipeline between Russia and Germany that the US doesn’t like…

It’s called Nord Stream 2.

It’s a US$9.5 billion subsea Baltic gas pipeline to take Russian gas to Germany.

Here’s a nifty map of its proposed route, thanks to the Economist…

Source: The Economist

The writer at The Economist calls it a ‘Russian trap’.

Unelected EU Council President Donald Tusk calls it a ‘mistake’.

The US is threatening to impose sanctions against it.

Hmm. What exactly does this have to do with America anyway?

German industrialists like it because it lowers their cost of energy.

Unfortunately for them, Germany is not a sovereign state.

The first problem is that Germany is still technically under occupation statutes with a suspended constitution — a relic of the Second World War[3].

It’s also been subsumed into the European Union — which evidence suggests was backed with US intelligence money and grand design from the very beginning[4].

You only have to pick up a copy of geopolitical analyst George Friedman’s book The Next 100 Years to see that a major strategic aim of the US will always be to prevent Russian natural resources uniting with German technology and industry.

They’re just copying the British, which pursued the same policy.

This helps explain why Britain encircled Germany before the First World War, entering an alliance with France on Germany’s western border and Russia to the east, long before the outbreak of war.

Both France and Russia had been enemies and rivals of Great Britain in previous generations.

An academic called Guido Preparata wrote a fascinating book called Conjuring Hitler. I read it last year.

He suggests the British deliberately cultivated a reactionary regime in Germany after the First World War to instigate an attack on Russia. Hitler is who showed up. Read it and make up your own mind.

We can see some of the undercurrent here show up in the gold market…

US dollar to weaken from here?

The Russian central bank, for example, has dumped US$101 billion in US dollars from its reserves[5] and placed them instead into yuan and euros. Russia and China are forging closer links.

Russian President Putin wants to ‘de-dollarise’ the Russian economy to escape the US financial repression via its control of the global financial system.

Russia now has the fifth highest official holdings of gold as well[6].

Certainly China and Iran will be right there alongside them cheering them on.

Recently I saw a suggestion that the US Fed is suppressing the price of gold on the American futures market.

They’re able to do that — if it is true — because gold is traded in dollars and mostly on US exchanges.

It’s another reason we could see the majority of gold trading shift to China over time.

It’s the world’s largest producer and buyer now.

More importantly, it suggests the US dollar may be much weaker than currently perceived.

We found out this month that the US trade deficit hit a record high last year, alongside the record federal government debt.

How long before this weakens the US dollar?

A falling US dollar from here would imply higher prices for commodities priced in US dollars such as oil and gold.

I can’t guarantee this outcome, but it might be time to start investing with this possibility in mind.


Callum Newman Signature

Callum Newman,
Editor, Profit Watch