18 January 2013, 16:54

'The world is in a state of financial war' - Russian presidential advisor

'The world is in a state of financial war' - Russian presidential advisor

Vedomosti reports that Sergey Glaziev, the economic mastermind behind the Eurasian Union, sent an official report to Kremlin, stating the necessity of a radical revamp of Russia’s economic policy in the wake of the second wave of global economic crisis. “Unknown sources” have provided the media with the contents of this highly controversial document, igniting a fierce debate in the press and blogosphere.

Glaziev’s report features apocalyptic predictions in regard to the state of the world economy but the most interesting part of the text refers to the so-called “currency wars”. Basically, one of the most influential advisors of the Russian president accuses both the US and EU of “legalized aggression” through unbridled monetary emission. Vedomosti cites several fragments from the report, “As a key point of their anti-crisis policy, they are refinancing their banks using negative real interest rates” and meanwhile “1.5 trillion dollars, 1.2 trillion euros and comparable amounts of yen and pounds are used to finance debt pyramids and acquire real assets across the world”. Western banks are accused of blocking their debtors in “debt traps”, with the ultimate goal of “obtaining political control” and “seizing the real assets” of the debtors.

Sergey Glaziev considers that such a policy is actually a form of legalized aggression and that the world is in a state of financial war. According to the conclusions of this report Russia “cannot win this war” without some major changes in its own economic strategy. Vedomosti reports that Vladimir Putin assembled a crack team of experts from Russian Academy of Science with a mission to create a brand new economic policy. Glaziev is reported to be the team’s liaison in the president’s administration, while the team itself is led by Alexander Nekipelov, a member of Rosneft’s board of directors.

According to the preliminary conclusions of this team, a radical revamp of Russia’s economic policy could lead to spectacular results. Glaziev’s report indicates the following key elements required for sustainable growth: radical increase of the savings rate, investment in breakthrough technologies (up to 4% of the GDP), and creation of a strong and self-sufficient banking system. Although the nation’s economy is considered a top priority, national problems cannot be solved without mitigating some of the global risks. According to the Russian media, the report contains a warning regarding the risks of a global military conflict, “The conservation logic of the current financial and political system leads to a further escalation of military and political tensions, including the start of major war”. There are solutions mentioned which serve as recommendations to avoid this outcome. A reform of the global financial system, spearheaded by Russia, is reported to be one of those solutions. It remains to be seen whether this initiative will gain support from other developing countries.

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