It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Tuesday, March 08, 2022
Biden says 'hate just hides under rocks' and 'when people come along and breathe oxygen into it, it comes roaring back out'
Bryan Metzger
President Joe Biden meets with his Cabinet at the White House on March 3, 2022.Anna Moneymaker/Getty Images
Biden spoke about his views on civil rights and democracy in a rare sit-down interview published Friday.
He said he "used to think that you could defeat hate" but has learned "all hate does is hide."
He also tied his struggle to unify the country to geopolitical crises like the Russian invasion of Ukraine.
President Joe Biden said he "used to think that you could defeat hate," but has changed his mind over time and now believes "all hate does is hide" until demagogues exploit it for their own purposes.
During the interview, Richardson asked Biden why Americans should be confident in the survival of American democracy, prompting a long-winded answer from the president.
"I still believe that the vast majority of Americans believe that — they don't think of the founding principles — they think that the United States is all about, at its root, being decent and honorable," Biden said. "They think that there isn't anything we can't do if we work together ... if we're united we can do anything."
Biden argued that hate and divisive politics often win out during periods of rapid change.
Biden first launched his campaign in 2019 with a message emphasizing a "battle for the soul of the nation," with his first campaign video focusing heavily on former President Donald Trump's equivocating response to a 2017 white nationalist rally in Charlottesville. However, he also came under fire during the 2020 Democratic primary over his civil rights record, particularly his role in authoring the 1994 crime bill, which critics say contributed to mass incarceration.
The president focused primarily on hate as a political force.
"I used to think that you could defeat hate. But all you can do is — all hate does is hide," said Biden. "What I realized is hate just hides under rocks, and what happens is when people come along and breathe oxygen into it, it comes roaring back out."
"One of the ways to gain power is to pit people against one another, based on things having nothing to do other than race, ethnicity, background, white supremacy," he added. "America began to lose its way a little bit."
"The same thing occurred internationally," said Biden, adding that the Trump administration focused on things that were "only good for America" and was putting forward a "sort of phony populism."
Biden said that he believed Russian President Vladimir Putin felt emboldened to invade Ukraine because "we have been so divided as European democracies and other democracies."
"I've spent all my time just trying to bring them back together again so we're on the same page," he added.
"The point is bringing nations and people together," said Biden. "And that's why in my administration — I think it's fair to say, I know it's accurate numerically — we have the most diverse administration in American history."
Biden stands up to reporter who quizzes him over how he backs abortion as a Catholic
Shweta Sharma Thu, March 3, 2022
Joe Biden stood up to a reporter who quizzed him over his support for abortion rights despite being Catholic.
Mr Biden was taking questions from reporters on the south lawn of the White House on Wednesday before boarding the presidential helicopter to Wisconsin, where he will deliver remarks on the bipartisan infrastructure law.
He was asked why he continued to support “abortion as a Catholic, defying church teachings”. The reporter was referring to his State of the Union address on 1 March, when he called for protecting women’s rights and acknowledged the attacks on abortion care.
Mr Biden said: “Well, I tell you what, I don’t want to get in a debate with you on theology. But, you know – well, anyway.”
“I’m not – I’m not going to make a – I’m not going to make a judgement for other people,” he added after the reporter again interrupted to say “but you’re Catholic”.
He then walked away to his helicopter with first lady Jill Biden on his side.
The US president’s forehead was marked with ashes for the Catholic holiday Ash Wednesday. He is only the second Catholic president in the history of the US and regularly goes to church.
He was questioned about his Catholicism and his pro-choice stance after his support to the landmark 1973 Roe v Wade decision, which legalised abortion nationwide.
The landmark ruling enshrining abortion rights in the US is back in the spotlight as the US Supreme Court reviews a Mississippi law banning most abortions after 15 weeks, potentially igniting a major challenge.
The 1973 ruling is considered the first successful litmus test protecting a pregnant woman’s right to have an abortion in the US, legalising the procedure across the country and setting a global precedent. The ruling repealed many federal and state abortion laws that restricted access for women or banned the procedure outright and sparked decades of religious and moral conflict, fought over women’s bodies.
Mr Biden’s stance has become a matter of debate among bishops, but the president, who has said his faith is a deeply personal aspect of his life, has described his stand on the topic as “middle of the road”.
During his first State of the Union speech, he said: “The constitutional right affirmed by Roe v Wade – standing precedent for half a century– is under attack as never before.”
“If you want to go forward – not backwards – we must protect access to health care. Preserve a woman’s right to choose and continue to advance maternal health care for all Americans,” he added.
Amid sexual assault allegations among students, Mount St. Mary vice principal, counselor resign
Vice Principal Whitney Faires and school counselor Mallory Tecmire have each resigned.
In a letter to parents and students obtained by The Oklahoman, interim Principal Diane Floyd said she accepted the resignations March 1.
“We expect all school administrators, faculty and staff at The Mount to follow the Safe Environment protocol and school policy to appropriately report suspected abuse or harassment of minors,” Floyd wrote in her letter. “Now that the review is concluded, we are moving forward with our focus on the Voices of Human Dignity Task Force to ensure our words, actions and policies reflect our mission and Catholic social teachings.”
The investigation opened in October after several alleged victims submitted letters to the Board of Trustees.
On Dec. 29, former Principal Talita DeNegri resigned after 19 years in the position.
After her resignation, the Archdiocese of Oklahoma City issued a public statement saying DeNegri “resigned after an independent investigation revealed The Mount administrative leadership failed to take action in response to reported allegations of sexual harassment and assault by students against other students.”
"Over the past several weeks, Mount St. Mary leadership including the Institute of the Sisters of Mercy of the Americas, the Archdiocese of Oklahoma City, and the Board of Trustees and I have continued the important work of reviewing the information we received from the independent investigator," Floyd wrote. "That review is now complete."
Ky is “the very worst” state for child abuse. These new laws could help us improve.
Kathryn Robb, Sen. Morgan McGarvey and Rep. Lisa Wilner Thu, March 3, 2022
The very worst.
That’s where the U.S. Department of Health and Human Services Children’s Bureau places Kentucky in the national statistics for child abuse. And it is not the first time Kentucky has received this shameful distinction. The National Child Abuse and Neglect Data System (NCANDS) collects and analyzes data voluntarily submitted by all 50 states, D.C., and Puerto Rico. Unfortunately, the Bluegrass State sits at the bottom of the class in child protection, with alarming numbers of reported child neglect, physical and sexual abuse.
It’s simply not acceptable for Kentucky to be the most dangerous place in the country to be a kid.
The data paints a disturbing picture for Kentucky’s children. According to the U.S. Department of Health & Human Services Children’s Bureau “Child Maltreatment 2019” report, Kentucky has the country’s highest level of child abuse. Kentucky is simply the worst and has stayed at the bottom of the rankings for three consecutive years.
And when it comes to exposing hidden child sexual predators and protecting institutions that fail children, Kentucky finds itself sadly at the bottom of that barrel, as well. No Ph.D. in statistical analysis is needed to understand the direct link between Kentucky’s archaic laws that protect predators and other bad actors and its alarmingly high rate of child abuse. Most states are responding to this epidemic of child sexual abuse by reforming their restrictive statutes of limitations that allow predators to slip through the cracks of our justice system where they hide in our most trusted institutions. About 90% of child sexual abuse is perpetrated by someone the child knows and once trusted – family, teachers, doctors, coaches, and clergy.
Since 2002, 27 states have reformed their statutes of limitations (SOLs) for child sexual abuse, 17 states have enacted revival legislation, and three jurisdictions have passed zero tolerance bills with elimination and permanent window. This year 26 states and the Federal government have introduced SOL reform legislation for child sex abuse, including 8 to eliminate criminal SOLs, 17 to eliminate civil SOLs, and 16 with revival or windows bills. Revival and window legislation opens the door to justice and returns the stolen voice of the child to victims. Once silenced by the enormous trauma inflicted upon them as children, they are given an opportunity to speak and identify their perpetrator. In doing so, they make the world safer for today’s children by exposing hidden predators and other bad actors.
These SOL reform bills serve children and the common good of the people of the Commonwealth of Kentucky. Three sound public policies are served:
1) Identifying hidden child predators and institutions that fail children.
2) Shifting the enormous cost of abuse from the victims and Kentucky taxpayers.
3) Educating the public about the prevalence of child sexual abuse.
Many well-intentioned people will argue “it’s not fair,” claiming we don’t do this for other civil wrongs. That may be true. However, these are not like other civil wrongs. These are not “slip and fall”, trespass, or dog bite cases. These cases involve the rape, sodomy, and sexual assault of innocent children and therefore warrant a very different legal and policy response.
There is an ever-growing national movement to protect children and honor justice for survivors. Like other legislators and advocates across the country, we understand the profound impacts of child sexual abuse. Through the brave voices of survivors and evidenced based research, we understand that perpetrators silence victims through fear, shame, manipulation, and threats, and the science that tells us that delayed disclosure is the norm. Based on that knowledge, lawmakers are making prudent changes to their laws and policies – by shifting legal protection from perpetrators to children, no longer giving perpetrators protection for the very silence they cause in their victims.
Presently, lawmakers in Kentucky have an opportunity to change this disturbing failing grade by passing SB 153 and HB 464, both of which would eliminate the civil SOL for child sexual assault and abuse. Abuse will decline when we change our laws to protect our children, not those who harm children, silence victims, and continue their institutional cover-up.
Let’s pass these bills to protect our kids, and so that Kentucky will no longer be the very worst.
Kathryn Robb is Executive Director of CHILD USAdvocacy. Morgan McGarvey is a Democrat from Louisville and Senate Minority Leader. Lisa Wilner represents House District 35 and is a licensed psychologist.
Kentucky Republicans want to attend your future OB-GYN appointment: Opinion
Nicole Stipp Fri, March 4, 2022
Kentucky Republicans are giving me whiplash: they have spent the last two years shouting about personal freedom in health decisions, and then Rep. Nancy Tate introduced a forced pregnancy bill so draconian, she might as well have marked her calendar so the government could join me at my upcoming OB-GYN check-up.
Rep. Tate went against the preference of the majority of Kentuckians and filed House Bill 3, which inserts politicians and the government directly into the doctor’s office. The bill creates onerous, medically unnecessary hoops for people seeking abortions to jump through and installs completely useless and redundant reporting into the medical procedure that will hamper and further stigmatize abortion.
Repeatedly, abortion has proven 95% safer than carrying a pregnancy to term - particularly if you are in America, are poor, Latinx, Black or Indigenous. Time and again, elected officials have been reminded that the vast majority of abortions happen before 12 weeks, when a fetus is a prune-sized collection of cells - but they’ve stripped Kentuckians from any access to at-home abortion pills which allow them to manage their miscarriage in the privacy of their own home. Imagine being a young woman in Paducah who experienced a birth control mishap and now needs to drive more than 7.5 hours round trip to pick up pills that have been proven by the FDA safe enough to be self-administered. Not only does she need to come up with reliable transportation for the trip, but likely also needs to miss multiple days of work. If she doesn’t have a car or gas money for the trip, she is now forced to carry a pregnancy to term because Rep. Tate has determined that her forced birth is more important than her ability to make her own medical decisions.
Further, the majority of people seeking abortions are already parents who are very clear-eyed about what is at stake, both financially and emotionally, when adding an additional child to their family. Parents or anyone receiving an abortion will now be forced to file a birth-death certificate and it is not as if government systems have proven able to keep any of our personal information confidential. Now HB3 will require a government document disclosing your personal medical decision to end a pregnancy. What if you truly want your pregnancy, it is unviable and you have to end the pregnancy so that you can mourn your loss and perhaps start trying again? Your family will be forced to file this birth-death certificate.
In the most alarming part of this House Bill 3, the government is being asked to create an online portal that would publish the information on any physician that provides a medical abortion to a private citizen. Let me pause for a moment to reiterate this: the government would be publishing a list of names and information on physicians that provide abortions on a public, state-sponsored web portal. Since 1977, the National Abortion Federation reports 11 assassinations and 26 attempted murders of abortion providers as well as 42 bombings and 189 arsons of abortion clinics. I wonder if Rep. Tate – who is clearly passionate about the government documenting abortions – will be as enthusiastic to sign her name to the death certificates of abortion providers who are killed on her watch, under the systems she will build with this law.
In a truly free society, those who become pregnant are free to pursue parenthood or are free to pursue an abortion because their bodily and economic autonomy are more important to our community than forced birth. None of us are equal and none of us are free if some of us can be forced by the government to carry a pregnancy to term because we live too far away from a clinic, don’t have insurance plans that will cover the procedure, need to end an unviable pregnancy or simply do not wish to have any more children. Nicole Stipp
Nicole Stipp is the Chair of the Board for Planned Parenthood Action Kentucky
Bestselling Author Shows How Trump Allies Are Plotting To Undermine Jan. 6 Probe
Ed Mazza
Bestselling author Don Winslow says former President Donald Trump’s allies have one goal in mind as they duck the committee investigating the Jan. 6 assault on the U.S. Capitol: running out the clock.
They’re refusing to cooperate ― and in some cases, defying subpoenas ― knowing their court cases will take time and hoping to stall past the midterm elections. Republicans appear poised to retake control of the House and shut down the investigation, which would let all of Trump’s allies off the hook:
The U.S. job market looks very healthy entering the spring.
"Today’s employment report continued to make one thing very clear — the U.S. economy is potentially witnessing the most fertile employment market in a generation," said Rick Rieder, BlackRock's chief investment officer of fixed income. "Indeed, the labor market recovery has overcome multiple variants of the pandemic, as well as supply chain shocks, which create higher input costs for companies, in turn pressuring profit margins. Still, corporations appear to be barely blinking at all of this and are moving right on ahead with bringing on more workers at ever-increasing cost."
Rieder's hot take on the economy was on full display for February.
The Labor Department reported Friday that the U.S. economy added back the most jobs since July 2021 in February. Non-farm payrolls rose 678,000 in February, easily beating analyst forecasts for 423,000. The unemployment rate ticked down to 3.8% from 3.9% in January.
Jobs for the prior two months were revised up by a total of 92,000.
"It's a very good economic recovery that the president is leading," said U.S. Labor Secretary Marty Walsh on Yahoo Finance Live. "You talk to the financial experts and they will tell you aside from inflation, we have a strong economy now in the United States of America."
Fed Chairman Jerome Powell this week strongly signaled a 25 basis point rate hike at the meeting later this month. But with inflation running rampant in part due to the developing situation between Russia and Ukraine, some pros are questioning whether the Fed needs to be aggressive on rate increases, regardless.
For his part, BlackRock's Rieder thinks Powell & Co. should proceed carefully on rate hikes so as to not disturb the fertile jobs markets in the U.S.
"We continue to see data that shows not only better employment conditions, and particularly for lower- and middle-income workers, but higher wages and improved benefits for that same cohort, which is something that the Fed should be very careful about not disrupting," added Rieder.
A REPORT BY AN anonymous Russian intelligence analyst alleges that the Russian forces in Ukraine could have suffered as many as 10,000 casualties, and claims that the Kremlin has lost contact with a number of divisions. The claims are included in a 2,000-word document published online by Vladimir Osechkin, a Russian anti-corruption activist and vocal critic of the Kremlin, who has been living in France since 2015. In the past, Osechkin has collaborated with the investigative website Bellingcat.
According to British newspaper The Times, which first reported on the claims made by Osechkin, the document originates from an anonymous intelligence analyst in Russia’s Federal Security Service (FSB). The FSB has inherited the domestic functions of the Soviet-era KGB and today operates as Russia’s internal security and counterintelligence agency. The anonymous analyst claims that the Kremlin kept the FSB in the dark about its intentions to order a military invasion of Ukraine.
The report adds that Russian President Vladimir Putin had based its estimations about whether the country could withstand Western economic sanctions on a number of optimistic forecasts produced by the FSB in the run-up to the war in Ukraine. However, these forecasts were nothing more than “hypothetical box-ticking exercises” in which intelligence analysts were expected to make Russia “the victor” in order to avoid the wrath of their superiors. No-one in the FSB thought these forecasts were going to be used by the Kremlin to make actual decisions about a war in Ukraine, it is claimed.
The Kremlin now realizes the extent of its miscalculation, says the anonymous analyst. However, it is too late to avert this “total failure”, which is comparable militarily only to the “collapse of Nazi Germany” in 1944 and 1945. The Russian forces in Ukraine could have already suffered as many as 10,000 casualties, even though the Russian government has only acknowledged close to 500 deaths of servicemen, the document claims. The true number is unknown even to President Putin himself, given that the Ministry of Defense has “lost contact with major divisions” in Ukraine. The report concludes with the assessment that “Pandora’s Box has been opened” and that Moscow “has no way out” of this debacle. “There are no options for a possible victory, only defeat”, it warns.
The Times said it showed the report to Christo Grozev, a Bulgarian investigative journalist, who supervises Bellingcat’s reporting on Russian affairs. Grozev told the paper that Ukrainian intelligence has previously produced fake FSB documents in order to frame the public narrative about the war. He argued, however, that “this letter appeared different” and that former FSB agents who had seen it appeared convinced of its authenticity. He added that Osechkin’s disclosures from Russian sources tend to be reliable.
► Author: Joseph Fitsanakis | Date: 08 March 2022 | Permalink
ON MARCH 3, 2022, Dutch newspaper Volkskrantreported that the Dutch Military Intelligence and Security Service (MIVD) took action in response to abuse of SOHO-grade network devices in the Netherlands. The attacks are believed to have been perpetrated by the Main Intelligence Directorate of the General Staff of the Russian Armed Forces (GRU) Unit 74455. The unit, which is also known as Sandworm or BlackEnergy, is linked to numerous instances of influence operations and sabotage around the world.
The devices had reportedly been compromised and made part of a large-scale botnet consisting of thousands of devices around the globe, which the GRU has been using to carry out digital attacks. The MIVD traced affected devices in the Netherlands and informed their owners, MIVD chief Jan Swillens told Volkskrant. The MIVD’s discovery came after American and British [pdf] services warned in late February that Russian operatives were using a formerly undisclosed kind of malware, dubbed Cyclops Blink. According to authorities, the botnet in which the compromised devices were incorporated has been active since at least June 2019.
Cyclops Blink leverages a vulnerability in WatchGuard Firebox appliances that can be exploited if the device is configured to allow unrestricted remote management. This feature is disabled by default. The malware has persistence, in that it can survive device reboots and firmware updates. The United Kingdom’s National Cyber Security Centre describes Cyclops Blink as a “highly sophisticated piece of malware”.
Some owners of affected devices in the Netherlands were asked by the MIVD to (voluntarily) hand over infected devices. They were advised to replace the router, and in a few cases given a “coupon” for an alternative router, according to the Volkskrant. The precise number of devices compromised in the Netherlands is unclear, but is reportedly in the order of dozens. Swillens said the public disclosure is aimed at raising public awareness. “The threat is sometimes closer than you think. We want to make citizens aware of this. Consumer and SOHO devices, used by the grocery around the corner, so to speak, are leveraged by foreign state actors”, he added.
The disclosure can also be said to fit in the strategy of public attribution that was first mentioned in the Netherlands’ Defense Cyber Strategy of 2018. Published shortly after the disclosure of the disruption by MIVD of an attempted GRU attack against the computer network of the OPCW, the new strategy included the development of attribution capabilities, as well as the development of offensive capabilities in support of attribution. It advocates the view that state actors “that are [publicly] held accountable for their actions will make a different assessment than attackers who can operate in complete anonymity”.
Op-Ed: Some poor Russian kid and his teddy bear went to war.
ByPaul Wallis Published March 6, 2022 There is a ban on Russian media mentioning the civilian deaths caused by the invasion of Ukraine. - Copyright AFP Kazuhiro NOGI
The familiar sight of a trashed Russian convoy in a video was a bit different this time. Western antitank missiles had shredded the vehicles. Prime movers were reduced to a trail of scrap metal. They’re not designed to take fire, and they didn’t.
Also present in this convoy, (see video at 1:38) was a teddy bear. Teddy bears aren’t usually invited to combat missions. The Russian army doesn’t enlist them. The Ukrainians don’t shoot at them. They have other things to shoot at.
This, therefore, must have been a very important teddy bear. It was certainly a lucky teddy bear. It was the only thing left intact in that convoy. A dead Russian soldier was almost intact, but not intact enough to be alive.
(The video considerately blurs the body. Nice to know not all camera people are ghouls.)
Who owns teddy bears?
People.
The shocking crime of teddy bear ownership still isn’t illegal for some obscure reason.
Teddy bears are truly universal. Nobody needs to be told what a teddy bear means. Everyone has had one, or something like one. Teddy bears don’t need explanation.
They’re always gifts of affection. Teddy bears mean a lot. You could see this one being given to the soldier as a gesture of love. A kid may have given it to a parent. A mother may have given it to her son. A girlfriend may have given it. Obviously, a lot of hope was attached to this teddy bear.
This teddy bear was still doing his teddy bear job, too. Despite his convoy being shot up, he gazes at the world with a friendly smile amid the carnage. He’s the epitome of something from a loving human environment given by one person to another.
Or to put it another way, he meant and means so much more than any trite symbol could ever mean. If there’s a war between propaganda and teddy bears, the teddy bears will win easily.
It’s also a perspective on this war and the abysmal state of the human race. This war isn’t about people. Not much is about people these days. It’s about geopolitical madness, spin, nukes, and everything but people. Politics in general is definitely not about people. Nor is finance. It’s all about a few people’s interests at the expense of everyone else on the planet. This war is a very good example of how totally devalued people are. Not even a cent in the dollar.
Stalin was totally wrong when he said people can’t comprehend a million deaths. They don’t need to; one or two is quite enough to get the message. In warfare, a lie repeated often enough doesn’t become truth; it becomes a lot more dead people, especially over time.
Some poor Russian kid and his teddy bear went to war. From the look of the vehicle, there probably wasn’t enough left to bury. The teddy bear, and the very human idea of teddy bears and what they mean to people, survive.
You tell me – What means more; the teddy bear idea of love and care or some totally pointless, unnecessary, damn war?
Get the hell out of Ukraine.
Concerns over impact of Russian sanctions on global financial system
Concerns are starting to be raised in financial media circles and by economic analysts about the effects on the global financial system of the sweeping sanctions imposed on Russia both immediately and in the longer term.
Combined action by the US and the EU have excluded seven major Russian banks from the Swift international financial messaging system. Banks involved in the oil market were excluded from the ban, but moves are now being considered to cut off Russian exports.
An image of a stock aggregator (Credit: QuoteInspector.com)
Even more significant than the Swift measure is the ban on foreign currency transactions by the Russian central bank. It has been prevented from using a large portion of its foreign currency reserves, estimated to total $630 billion, to prop up the rouble and country’s financial system.
While the central bank nominally owns its reserves, they are held in large measure as digital entries in the accounts of other banks. These accounts have now been frozen, effectively expropriated.
An article in the Financial Times noted: “This digitalisation separates ownership and control of FX (foreign exchange) reserves. Russia owns them but Western issuers and computerised holders of these assets control access to them. … From a source of economic strength during peacetime, FX reserves turned into the source of a crash during war.”
While the measures against Russia are not unique—the US has used them against other smaller countries in the past—they have never been deployed on such a scale. Russia, with a GDP of around $1.7 trillion, is the world’s 12th largest economy and a member of the G20.
So far, the world financial system has not been adversely affected—US Fed chair Jerome Powell said last week markets were “functioning well.” But it is still early days and there are concerns about flow-on effects.
An article in the Wall Street Journal made the point that the sanctions could remove a direct source of short-term funding for Western banks and spread fear among them. It could make them “hesitant to lend to one another because they don’t know who might have exposure to Russia.”
In a recent note to clients, Credit Suisse analyst Zoltan Pozsar estimated that the Bank of Russia and private sector Russian entities together have loaned about $200 billion in the foreign-exchange swaps. Another $100 billion of Russian money is deposited in banks outside the country. A total of $300 billion was a significant amount and enough to influence funding.
Pozsar said linkages in the financial “pipes” could generate unexpected shocks by jamming the flow of money, as with the collapse of the US investment bank Lehman in 2008.
The collapse of the $3 billion US hedge fund Long-Term Capital Management in September 1998 is also being remembered. It had to be bailed out by the New York Reserve because its demise, the result of wrong bets on the rouble, threatened to provoke a crisis for the entire US financial system.
FT columnist Gillian Tett recently wrote there was “concern that some emerging market funds will dump non-Russian assets to cover losses on frozen Russian holdings,” amid talk that some overleveraged hedge funds had been wrongfooted and “memories of the 1998 collapse of Long-Term Capital Management are being revived.”
Economic historian Adam Tooze has commented that Russian reserve accumulation, derived from its oil and gas sales, is a source of funding in Western markets and “part of complex chains of transactions that may now be put in jeopardy by the sanctions.”
Longer-term concerns about the future direction of the international monetary system and the world economy are also being raised. An editorial in the Economist headlined “A new age of economic conflict” said the implications of the sanctions on Russia were “huge” and marked a “new era of high-risk economic warfare that could further splinter the world economy.”
One issue that has been raised is that the sanctions, which demonstrate the enormous financial power of US imperialism because the dollar functions as the world’s major currency, will lead to a bipolar financial world—one based on the dollar and the other on the Chinese renminbi.
There is no realistic prospect that the renminbi can assume anything like the dollar’s global role given the fact that the Chinese financial system is controlled by the state while US markets, by contrast, are open and liquid. Furthermore, at present the renminbi is used to finance only 2 percent of world trade. While there are predictions it could rise to 7 percent in the next few years, it is dwarfed by the position of the dollar which finances 59 percent.
However, as the Economist noted, the sanctions will have long-term effects, the implications of which were “daunting.”
“The more they are used, the more countries will seek to avoid relying on Western finance. That would make the threat of exclusion less powerful. It would also lead to a dangerous fragmentation of the world economy. In the 1930s, a fear of trade embargoes was associated with a rush to autarky and economic spheres of influence.”
While the editorial did not make the point, this fracturing was one of the economic driving forces behind the eruption of World War II.
China will no doubt be carefully examining the implications of the Russian sanctions because in a war, or even a conflict over Taiwan or some other issue, the US and Western powers could freeze its $3.3 trillion of foreign reserves. Other countries, such as India, “may worry they are more vulnerable to Western pressure,” the Economist said.
An article by Wall Street Journal writer Jon Sindreu said the sanctions on Russia, which showed that reserves accumulated by central banks can simply be taken away, raised the question of “what is money?”
He noted that, in the wake of the Asian financial crisis of 1997–98, scared developing countries sought to protect themselves by accumulating foreign currency holdings, raising them from less than $2 trillion to a record of $14.9 trillion in 2021.
“Recent events highlight the error in this thinking: Barring gold, these assets are someone else’s liability—someone who can just decide they are worth nothing,” Sindreu said.
In the 19th century and into the first part of the 20th, the world financial system operated on the gold standard. This system collapsed with the eruption of World War I and attempts to restore it in the 1920s failed, leading to the breakdown of international trading and financial relations in the 1930s and a return to barter in some cases.
A new system of international finance was devised at the Bretton Woods conference of 1944 where it was determined that the US dollar would function as the global currency, with the proviso that dollar holdings could be redeemed by gold at the rate of $35 per ounce.
The Bretton Woods system was ended in August 1971. Due to mounting balance of trade and balance of payments deficits, reflecting the start of the economic decline of the US from its absolute post-war dominance, US President Nixon unilaterally removed the gold backing from the US dollar.
Since then, the world economy has functioned entirely on the basis of the US dollar as a fiat currency, one that has no backing by gold or any other commodity embodying labour, the ultimate source of value within the capitalist system.
Money within the capitalist economy is not only a means of financing trade and financial transactions, it is also a store of value. With the dollar operating as a fiat currency this function been sustained through a kind of fiction, or circularity. The dollar is eagerly sought after because it is regarded as a store of value, and it is a store of value because it is needed as a means of payment for international trade and financial transactions.
Now the basis of this system, which has operated for the past 50 years, is being called into question.
As Sindreu put it, “the entire artifice of ‘money’ as a universal store of value risks being eroded by the banning of key exports to Russia and boycotts of the kind corporations like Apple and Nike announced this week.”
If currency balances become “worthless computer entries” then there will be a shift back to gold.
He noted that one of the barriers to China’s push to internationalise the renminbi has been the fear that access to it was always at risk of being revoked by political considerations. “It is now apparent that, to a point, this is true of all currencies.”
His conclusion was that: “For once the old trope may not be ill advised: buy gold. Many of the world’s central banks will surely be doing it.”
Just as the US-led NATO military war against Russia marks a new stage in geopolitical relations, directly raising the threat of world war, its weaponisation of finance has raised all the contradictions lying at the very heart of the capitalist economy, including within the entire value and monetary system.
