World is headed for a global revolution – authors

http://rt.com/Top_News/2010-03-24/bianki-sychev-world-crisis.html
World is headed for a global revolution – authors

The world may have been brought crashing to its knees by the economic crisis, but some say we have not seen anything yet.

The authors of a radical new book, entitled “After the World Crisis”, claim that while America continues to accumulate debt, China is growing ever more powerful, which could trigger a global collapse.

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RT: Sergey Sychev, Valentin Bianki, authors of the book “After the World Crisis”, thank you very much for meeting us today. Valentin, in your book “After the World Crisis” you give advice on how Russia should be acting in times of the global economic crisis. What inspired you for such a global project?

Valentin Bianki: We believe that our viewpoint on what is happening and why it is happening has something to add to the purely economic interpretations, that’s why we had the courage to make statements about this global phenomenon.

RT: Former US Secretary of the Treasury Henry Paulson in his memoirs says that Russia and China have conspired together to bring down the US dollar. Russia, naturally, refuses to accept such charges, but what’s interesting is that your book actually repeats the idea. Is this a coincidence?

Sergey Sychev: We finished the book at the beginning of 2009. After it was published, we presented it in May, and I personally delivered a copy with an invitation to the US Consulate in St. Petersburg. As far as I know, the CIA works very efficiently. And I have no doubt that the report on our writing traveled up many levels of authority. It might have reached Paulson. Since the book was written as a piece of advice to the Russian government, it might have been interpreted as a non-fictional piece of writing.

RT: Your book also talks about the dollar playing two roles – first, that of the US national currency, and second, that of the world’s global reserve currency. And it goes on to discuss the necessity to have a different reserve currency. How realistic is this and what real prospects does the US dollar face?

VB: To put the book’s idea in a nutshell, it argues that the dollar’s value is bound to drop dramatically and it’s inevitable. The parties to win will depend on how technically this happens and who starts to get rid of the dollars first. The USA might implement the scenario we call the basic one, which consists of staging a series of US-controlled crises across regional markets. When you possess a large mass of money it is easy to saturate a local market with it, thus warming it up. After that, the local market players – for example in Russia – will also start playing on the rising market.

When the initial mass of money cracks down, the market will collapse.

You can do just the same thing to a commodities market. If the USA makes the dollar’s value drop after it arranges the collapse of all the world’s regional and commodities markets, and then buys their newly printed dollars cheaply, it’ll make a huge profit and retain the dollar as the major global currency. On top of that, it will strengthen its position on the global economic scene.

If the downfall of the dollar is caused by other players, China and the USA as the major holders of the US dollar reserve shall get rid of it immediately – unlike Russia which is getting of rid of its dollars now gradually cheaply, and thus will result in the dollar’s collapse. This means that the US economy is not facing a good a time. It will be constrained to one continent and the dollar will no longer be a global currency.

RT: You are also developing the idea that the collapse of the US dollar does not necessarily imply the collapse of the United States. Is this possible?

VB: By staging local and regional crises all over the world the United States is promoting the global perception that the US economy is the only stable economy in the world. No one cares that the EU requirements to the budget deficit are well below 10 per cent, while in case of the United States this figure is a lot higher. Despite this, everyone keeps thinking that the US economy is the most stable and reliable one in the world. They convert their assets into dollars as the only reliable remedy against losing value.

Thus, if I exaggerate just a little, the United States gets to virtually possess all the global capital assets including productive assets and commodities, while the rest of the world gets the stock of dollars. After that, the collapse of the dollar will reduce the US debt and the world’s dollar stock to nothing while the United States will still keep all the global production facilities and commodities.

That’s the scenario, and it’s logically correct. It is hard to believe, but it is free of any logical error, that’s why we think it’s quite possible to happen.

RT: Sergey, it’s quite typical for Russia to blame the United States for all the troubles. We get hit by a crisis and immediately say that it’s America’s fault. What, in your view, are the real causes of the economic crisis? Is it also America’s fault?

SS: In some sense, the crisis was inevitable. When, in 1970, the United States dropped the gold standard and started to trade dollar, the dollar got to be no longer backed by gold or assets. Thus they have the currency but it has no backing reserve. The US debt is growing while the reserve from which to pay it off from is not. This is the first reason for a crisis, whereas the second reason consists of the production having been moved from the United States, the former global production center after World War II, to China and the third world countries. So what are we getting? We are getting the production located in China, Indonesia and India while the centers of consumption are in America and Europe.

So, speaking conventionally, we are in for a global revolution. In the first place, China will realize that it is the major productive power in the world, while the United States is the consumer, and why on Earth should they support them? And the gap only grows. China produces, the United States consumes. The United States is accumulating debt, while China accumulates the real finance and production power.

At some point the US capacity to control this situation became just obvious. In other words it’s not America’ fault, rather it’s something unavoidable. It’s destined, pre-determined by the dominating economic model of consumption.

RT: If we compare the anti-crisis measures in Russia, Europe and Obama’s Stimulus Plan, what would be the difference and what’s more effective, in your opinion?

SS: One should bear in mind that America and Europe have long-standing stable financial institutions. In Russia, they are much younger and less stable. Therefore, the measures are different. I see a great difference in the measures, for instance, Obama in his plan has chosen to finance innovative technology, and thus we talk about a huge investment into in the technology of the future. It may turn out right or wrong. Usually, when you invest in a number of types of technology, only one is going to pay off. Or it can work out as with what the Americans say about their flight to the Moon project – in the end they developed a microchip, and it turned out to be the project’s major achievement. As for us, our plan includes supportive measures. We also plan some investments into future technology, the way Europe and America do, but in a much smaller amount.

RT: Valentin, the world economic crisis has sparked a controversy as to whether a new world financial system is necessary. What should it be like, in your opinion?

VB: The most probable scenario so far is the emergence of dollar-dependent but yet macro-regional currencies. These projects have existed for many years, but it’s only in the last two years that they’ve started to be seriously implemented. The Middle East dinar is a good example. There is a desire and attempts are being made to make the ruble a regional currency, at least through trade with neighboring countries. But the ideal project is the creation of a unified ruble zone with Kazakhstan, Belarus and, possibly, some other country. But despite the fact that attempts are being made, it’s so far difficult to make any forecasts.

RT: What role can Russia play in defining and developing new global economic projects?

SS: Russia has an enormous untapped resource which hasn’t yet been used. It’s Siberia. The key goal at this stage is linked to territorial development. If the crisis keeps developing, and it surely will, an army of unemployed and impoverished people will appear in Europe. Why not repeat a move which America did in the 19th Century, when vast territories in the Wild West were simply handed out to immigrants for development.

We can grant people from Europe declarative citizenship and allocate land allotments in the Siberia and the Far East where there are plenty of agricultural lands and forests.

We will replenish our dwindling population and will be able to develop a region which is now deserted.

So far we don’t have enough internal resources to develop these territories. We should attract population who will care for this land.

RT: As a rule, economic processes impact the formation of socio-political systems or tend to alter them. How can modern economic cataclysms affect the general political world order?

VB: It’s highly probable that a geopolitical balance will be restructured. The location of points of growth, of macro regions that will change their fundamental role in the world, will be important. But processes linked to a new hypothetical model of social set-up under the impact of economic issues are even more interesting. The introduction of the notorious Tobin tax on financial transactions, or a measure like the establishment of trade limits in order to prevent a situation when some countries sell and others buy goods from a couple of countries with an effective mechanism of sanctions – all this can also change the general motivation of the planet’s population. This blocks a trend to super-consumption which is infecting all countries after Europe and the United States. Another direction, which can bring about fundamental changes, though formally it is little linked to the economic crisis, is the development of new advanced technology and biotechnology. With a certain degree of probability, super breakthroughs can be expected in either of these two areas. A country that will be able to carry out such projects will be able to change the world economic set-up and the balance of power.

RT: Sergey, what ways of Russia’s foreign economic development seem optimal to you? What are our nearest priorities?

SS: Russia should be interested in itself, and the task of the government is to work for the sake of the country. In this sense, America is pursuing an ideal policy. It’s so egoistic and so oriented at defending the interests of the American people that we do have to learn how to do it from the United States. We have problems of under-developed territories, infrastructure and under-developed sectors of the economy which are easy to develop.

The second thing is ideology. This is something what the state and the government should deal with. It’s important to create new motivation among people. Today we have the motivation to consume: conspicuous consumption determines a person’s status. We should start forming the motivation to produce.

It’s necessary to advocate profit, innovation and technical inventions. If we are going to be as purposeful as Western countries in doing that, then our efforts will be rewarded and will certainly produce good results.

RT: Has the crisis stopped or is it just the beginning of global changes?

SS: I think that it hasn’t even started. So far the government has been curing its symptoms as it tried to suppress its most vivid manifestations in 2008-2009. The underlying reason of America’s debt and imbalance of production remains. But America is only building up its debt and is entering a stage of a much deeper crisis which is inevitable.

http://rt.com/Top_News/2010-03-24/bianki-sychev-world-crisis.html