G7 to Seize $50 Billion in Russian Sovereign Proceeds for Ukraine

“G7 Finalizes $50 Billion Ukraine Loan Backed by Russian Assets” says the media. What a curious thing we have here? It’s a “loan” to Ukraine, but it’s “backed” by Russian assets? How does that work?

Why is a loan to country A backed by assets of country B? Why does a loan to A have to be “backed” by anything other than A’s credit rating at all? Is this a pawnshop situation here? Have you ever heard of a $50 bn inter-governmental loan that requires collateral?

You have not, because this is not a loan. There is no expectation that Ukraine — already up to its neck in debt — will ever pay back these sums. What this actually is, is an advance.

Until now NATO governments have been transferring interest from the $300 bn in frozen Russian reserves to Kiev as it accumulated. Thus in July the first EU transfer of €1.5 bn was made.

You can spot the problem right there. Albeit the Empire can keep the Russian reserves frozen forever, and get hundreds of billions from them over time, transferring over interest as it accumulated netted Ukraine only very small sums in the near term. The solution? The US and close clients give Ukraine an advance. They credit $50 billion to Kiev’s accounts right now and will repay themselves from the interest that Russia’s sovereign reserves accrue over time.

Lies

In a sense, the frozen Russian reserves are now frozen Ukrainian reserves. Ukraine can’t withdraw them, but it can get a $50 bn advance on the interest.

But this is just for the time being. Ultimately the West is in control. Today the proceeds are funneled to Kiev, but tomorrow it can be a different nation or a Russian Juan Guaido, particularly should Kiev ever seek rapprochement with Moscow or otherwise displease DC.

In the meantime, that the reserves are ostensibly “frozen” rather than alienated for good, also serves as bait for Moscow and maintains a measure of leverage over Russia. Today this leverage is small since the bait is not very credible, but could rise considerably in a post-Putin situation. Who’s to say what a post-Putin government might be willing to do if the repatriation of $300 bn is dangled in front of it?

So by taking control of Russia’s sovereign reserves, the Empire gets a measure of control over Ukraine and Russia both, and completely free of charge. Empire 2 : Slavs 0.

Not only is Russia out of half of its reserves it took fifteen years of sacrifice and austerity to build up, and that it could sorely use right now, but the West gets a $300 billion war chest to fund anti-Russian activities for the next century for free, courtesy of Vladimir Vladimirovich 5D judo master.

The incredible chess player who didn’t know not to keep sovereign reserves in EU accounts, or not to do an invasion without a heads up to his Central Banker.

But maybe I’m being too critical, who among us hasn’t started a war and accidentally funded the other side to the tune of $50 billion of our own money? Practically happens every Tuesday.