Droplet

Ukrainian summit in Switzerland redraws the world map (Moskovsky Komsomolets)

It is important for Russia not to miss the moment of friendship

But in general, if you look at the world map with the list of participants and non-participants of the “summit”, you can see a map of the world from the time of my youth, in which the USSR and the social bloc still existed. Those who did not come to the “peace conference” were mainly friends of the USSR and the countries of the social bloc - South and Latin America, Africa, China, and the Global South in general. And the explanation is very simple: this whole “peace conference” was quite obviously not “for Ukraine”, but against Russia. It is quite possible to agree with the writer Prilepin: “It is easy to notice that the political forces, one way or another, left to us as a legacy by the Soviet Union, the inertia of whose influence is still great and it would be unreasonable to underestimate it,” were largely absent from the summit.” I would add that this inertia received an additional impetus when Russia launched the Special Military Operation and for the first time dared to challenge the West.

In Russia they began to see the image of the USSR - the country that led the anti-colonial movement. And it is absolutely obvious and natural that our current friends are countries with left-wing socialist regimes, countries dominated by communist ideology, countries fighting for independence and trying to break out of the shackles of neo-colonialism. (We should not miss this moment ourselves and finally decide on our own ideology.)

lol. The former Komsomol turned pro-Putin liberal semi-mainstream press now suddenly remembers the socialist legacy of the USSR.

French far right pulls manifesto that included controversial Russia, NATO plans (Politico)

The now-deleted documents proposed a closer “alliance” with Russia and exiting NATO.

PARIS — With the countdown to the French snap election underway, is the National Rally wobbling on its Russia-friendly defense agenda?

The far-right party has quietly removed part of its defense policy offering from its website, deleting sections that proposed deepening diplomatic ties with Russia, halting cooperation projects with Germany and exiting NATO’s integrated military command.

The deleted proposals hailed from Marine Le Pen's presidential run in 2022, in which her party had laid out 17 thematic booklets outlining its proposals across all policy areas. While 16 booklets remain online, the one on defense was removed from the web page some time after June 11. It can still be found online at a page that is no longer linked to on the party's website.

…

In the manifesto, the National Rally had advocated distance from Washington while trying to engage with Moscow. Noting that Washington "does not always behave as an ally to France," Le Pen's program in 2022 proposed to seek "an alliance with Russia on certain issues," such as European security or combating terrorism. The withdrawn document also said that France should "immediately" leave NATO’s integrated military command.

The deleted document also proposed "to put an end" to cooperation projects with Germany in the military sector, given "a deep and irreconcilable doctrinal, operational and industrial divergence with Berlin." Those include plans for jointly developed next-generation battle tanks and next-generation fighter jets. In recent months, the National Rally has toned down some of its most controversial positions.

In March, National Rally lawmakers abstained on a vote on military aid to Ukraine, while MPs from the left-wing France Unbowed voted against. The same month, the National Rally's rising star and president, Jordan Bardella, told POLITICO that France should wait for the end of the war in Ukraine before leaving the military alliance’s integrated command. Bardella is slated to become prime minister if the National Rally wins the parliamentary election.

In its program for the 2024 European election, the party didn't reiterate those proposals. Instead, it said that "Russia [was] violating international law and provoking a revision of the international order."

In recent days, the National Rally has also backpedaled on some of its most expensive economic proposals, as the prospect of having the far right in power is spooking markets.

lol. How many times do we have to say that nobody in Europe, especially the far right, will ever pose a meaningful opposition to NATO and their American masters?

Has nobody learned the lesson from Italy’s Meloni? Whenever they’re about to get into power, they’ll change their tune.

I’ll start memorizing verses from Capital and their chapters so I can drop them randomly on Hexbear threads to be annoying.

War must be going so well for Russia that Putin has to run to North Korea and beg Kim for ammunitions lol. Russia has really been relegated to a pariah state now.

(cont’d)

Final note: because eurozone countries do not have monetary sovereignty (i.e. they cannot create their own currency), the governments effectively function like a state government under a federated system that needs to finance its own spending through taxation and borrowing. None of the benefits of the fiat system applies to the member states of the eurozone.

Also, I have omitted the foreign sector (trade) for simplicity’s sake. But the upshot is that as long as you have energy sovereignty, food sovereignty and low external debt (denominated in foreign currency), your fiscal constraint using a fiat currency system is going to be a lot less as long as the goods and services are purchasable in the currency you can create. Unfortunately many Global South countries need the dollar to import essential commodities, as well as having borrowed in dollar-denominated debt, which makes it much harder for them to spend in large quantity in their own currency.

This is more of a matter of colonialism/imperialism and very little to do with “printing too much money will cause inflation” or “the government cannot spend more than what it earns” which are all neoliberal myths.

I’ll try to make it as simple as possible.

National debt is just a holdover from the gold standard era (or a fixed exchange rate currency i.e. your currency is pegged to another currency).

You see, during the gold standard era, your currency is tied to the amount of gold you have (which has a stable price). Let’s say your economy has $100 billion in circulation, you need $100 billion worth of gold in reserve to back your currency.

Now, let’s say we want to build a hospital - it will cost $1 billion. If you “print” $1 billion to spend on the hospital (hiring labor, buying raw materials etc.), then your economy would have $101 billion, but you only have $100 billion worth of gold. That means your exchange rate will be driven down by the excess spending.

How do you spend that extra $1 billion to build a hospital without breaking the constraint of your gold reserve? You either have to take money out of the circulation - exactly $1 billion, or you have to increase the amount of your gold reserve.

First, let’s explore how you can take money out of the circulation: one way is through taxation. You increase taxes of the citizens by $1 billion so you can spend $1 billion to finance a hospital construction in return. This is where the common notion of taxation funds government spending comes from. But in reality, this doesn’t make sense: the government prints its own money, why would it need to earn tax revenues from the citizens? Well, the reason is simply that the government wants to take that money out of the circulation before it can spend the new money, because it needed to defend the currency exchange rate against the gold reserve it has.

Another way to take money out of the circulation is through issuing government bonds. Here, instead of destroying the money it collected (taxation), private citizens lend their money to the government to be safe-kept in a special account, for 1/5/10 years, which then pays interests at maturity. This enables the government to effectively take the money out of the circulation but the private sector/citizens don’t have to lose their money. It is being “safe-kept” and the government “promises” to give you interests in return after a few years of not using your money. This is where the common notion of government borrowing finances government spending comes from. But really, it’s function is to take money out of the circulation.

Next, instead of taking money out of circulation, the government can also increase the amount of their gold reserve. There are three basic ways to do that: dig (find gold in your own backyard), buy (export goods made using your resources and labor in exchange for gold) or steal (colonize and steal another country’s gold/resources and then sell for gold).

As you can see, the gold standard imposes a lot of fiscal constraints on government spending. The same applies to a fixed currency (e.g. pegging your currency to US dollar, for example, as was under the Bretton Woods era). If you want to spend too much, you risk devaluing your currency, which causes import to become more expensive, then inflation. This was the case for the British empire and the pound sterling. During warfare, they had to borrow excessively to finance their spending, which resulted in heavy financial burden after the war.

Clearly this system was unsustainable (either gold or Bretton Woods), so it finally crumbled in 1971 when the French, having received so much US dollars remitted from French Indochina banks during Vietnam War that the US clearly did not have the gold reserve for, demanded that Nixon pay them in gold instead of paper dollars. Nixon shocked everyone by abandoning the Bretton Woods, and thus we have entered (by accident) the fiat era, where currency is not backed by gold or any commodity, but simply backed by the state (or, its ability to coerce taxation on its citizens).

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The government debt is as such a holdover from the gold standard/Bretton Woods era, but it takes on a new role that has very little to do with financing public spending.

Now, lets’ see what happens during government spending in a fiat currency system.

You see, when a government spends (in a fiat currency system), what happens is really that Congress (let’s say the US) approves a $1 billion spending bill to build a hospital, the Treasury then goes into overdraft with a $1 billion spending, and the Federal Reserve (central bank) creates $1 billion reserves, which then goes into the reserve account of the private bank (let’s say Chase), which then allows the private bank to create $1 billion deposit in the account of the company the US government has contracted to build a hospital.

Note: understanding the following details is optional. It’s really just accounting and operational mechanics of central banks and little to do with what the government can actually spend.

Reserve accounts are special accounts used by private banks (and also foreign banks) within the Federal Reserve (central bank) to transfer the reserves for daily operations. The reserves are what allowed the banks to clear your checks - when you take a check worth $1000 to deposit in your bank (Bank A), what happens is that $1000 from the reserve account of bank B (the payer’s bank) is transferred into the reserve account of Bank A (the depositor’s bank). This then allows Bank A to create a $1000 deposit in your account, that you can then withdraw as cash.

[In other words, $1000 is debited from the payer deposit/checking account in Bank B, and $1000 is debited from the reserve account of Bank B in the central bank. At the same time, $1000 is credited to the reserve account of Bank A in the central bank, and an equivalent $1000 is credited to the deposit/checking account of the depositor (you) ]

At the end of each day, the banks will have to make sure that they have the sufficient amount of reserve as required by the law (say 10% of their total deposits). The most important point here is that banks don’t really want to keep more reserve than are required, because those are dead money that doesn’t earn any interest, so they’d want to lend them out (within the central bank that is inaccessible to the public). Because of interbank transactions, on each day, there will be banks with less reserve than the required threshold (maybe because a lot of money is transferred from their bank to another), and there will be banks with more reserves than needed (because maybe more money is transferred to their bank on this particular day). So, the banks with less reserves will borrow from banks with more reserves to make sure they meet the legal requirement of maintaining a sufficient amount of reserves.

However, one problem here is that because banks will compete to lend out their excess reserves, this will drives interest rate down eventually to near 0% (because nobody wants that dead money, even a very small yield is still worth lending), which would be below the target interest rate set by the Federal Reserve (Fed fund rate), say 2%.

This is where government borrowing comes in. To ensure that the interest rate can be targeted at 2%, the Treasury issues bonds at 2% interest. Now, banks with excess reserves are faced with two choices: lend their reserve out to the government and earn 2%, or compete with one another to lend to other private banks and drive down the interest to 0%. Obviously banks will want that 2% interest, so, simply by issuing government bonds, the government has effectively set the minimum lending interest at 2%.

But what does this has to do with government/national debt? You see, it’s actually very simple and stupid at the same time. When the government spends $1 billion, the Treasury goes into $1 billion overdraft, creating $1 billion excess in the interbank reserves (within the central bank). These extra $1 billion are practically free money for the banks, and they will want to lend out as soon as they can, which will eventually - once again - drive the interest rate down to 0%. Now, to target a 2% interest rate, the Treasury simply issues “government bond” (debt) to soak up all those $1 billion excess reserves and at the same time “balancing out” the $1 billion overdraft in its account.

That’s it - there is nothing special about the government debt in a fiat currency system. Every time a government spends $1 billion to build a hospital, the Treasury issues a $1 billion debt to balance out its books which has nothing to do with the actual capacity of the government to spend. It’s pure accounting and central bank operations - the government debt serves as a drain of excess reserve liquidity in the central banking system.

Note that all these took place in the reserve accounts within the central bank. It has nothing to do with the money you can access in your bank accounts.

For the US as the global reserve currency issuer, there is an extra function for the government debt as well: when the US recklessly spends billions of dollars overseas, foreign central banks earned those dollars and after spending some of those dollars to import stuff (because they are net exporters and the US is net importer, the net exporting countries will always end up holding more dollars than they can spend), because they are not allowed to purchase critical US assets, the only way to use the money is by buying US Treasury debt promising a few % of interests.

Thus, the US treasuries effectively serve as a drain that absorbs the excess dollar spending overseas, allowing it to regulate how much dollars are being circulated in the world. So, it is not correct to say that foreign banks lend their dollars to the US government to finance US deficit spending, it is simply that the excess dollars had nowhere else to go and are “recycled” back to the US shores in the form of treasury bonds (national debt).

Russian hackers hacked the results so it flipped to a Trump victory instead.

Serious answer: the DNC was not in a position to admit defeat, for it would mean conceding defeat to the progressive wing led by Bernie Sanders, which was growing stronger by the day back in 2017. Hillary’s loss had to be blamed on something, or someone. Lie through the teeth if they had to, but they cannot risk having their party getting overrun by the progressives. The Russians thus became the scapegoat to this intraparty struggle in the DNC.

The Mueller Report instead uncovered the collusion between Trump and Israel.

I am sorry to inform you that this goes way back, several generations back, when Putin’s grandfather, Rasputin, hatched a devious plan to introduce the concept of racism into a racially harmonious America in the late 1800s.

This is a generational war between America and Russia, the battle between Light and Dark, between Good and Evil. With the Lord’s help, America shall prevail.

If that had been the case, they would have let the post-Soviet Russian industries running.

Leveraging high risk debt to gut failing industries and then selling off parts for a quick profit is the modus operandi of private equity firms. You can keep repeating this process as long as there are plenty of cheap assets to takeover, rinse and repeat until only the skeletons remain (maybe they’ll chew the bones as well).

The Soviet industries were completely gutted and people left to starve on the streets.

What is happening today to Europe is the same as what the US/European powers did to the post-Soviet states after 1991. Where do you think the wealth that enabled the formation of EU came from? The monetization of assets that laid the foundation to the euro currency? The Europeans weren’t some super economic geniuses who created a system that is superior to everyone else. Their wealth literally came from gutting the Soviet industries in the 1990s.

Only Russia/USSR-adjacent countries use Yandex, and even then it’s even competition with Google, which dominates >90% of the global market. The only market that Google could not penetrate is China, which uses Baidu mostly.

It is unlikely that these Russian-speaking people search in English terms though (might as well use Google), so the chances of reaching a large audience through Yandex search is very small.

On the other hand, it does show that Putin likes to browse Hexbear more than the grad (no shade to our grad comrades, Putin simply likes the contents on Hexbear better).

Maybe this is why the US is ramping up pressure on Ukraine? Once again Europe will be disciplined for not knowing its place, though this is expected behavior because there is simply not enough oil and LNG to supply to Europe to keep its industries barely running, even with much of its demand already gone.

The problem here is that we can see the US is really playing with nuclear threats along the European borders to intensify the conflict and further de-stabilize the region, and not ramping it down.