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China, Russia and Gold in the De-Dollarizing World

An asset backed currency, used by Russia and China, may be the biggest challenge to Emperor Dollar.

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Trending and gaining traction throughout the economic world is the increasingly relevant search for safe, stable and secure alternatives to the US Dollar. Some due to geopolitical reasons and pressures, others from recognizing the significantly deepening debt associated with the US Dollar and government. Many have started questioning and doubting aspects of its sustainability and inviolability over the ballooning short and long term. Recently underscored by expected “trade negotiations” with the US’s largest debt holders (Japan & China) which are now to include exploring sovereign debt restructuring, usually an indicator of financial indigestion.

Others are looking to innovative crypto ideas in the hope that extra-governmental blockchain backed mechanisms of peer-to-peer “agreed value” might be the path to securing wealth. In short, all of these approaches are looking for the security which gold together with similar recognized hard assets like silver have provided and assured since the dawn of our varied successive civilizations.

China, Russia, Turkey, Iran and quite a few others see themselves sanctioned, shackled and hindered by the overwhelming market dominance of the American currency and the quickly changing policies linked to it by successive US administrations most especially of late. Some refer to this as the  “weaponization” of the US Dollar as this millennia’s new normal, the gatekeeper of trade permission.

The tariffs introduced by the US government as a form of behavior modification for other nations are understandably unappreciated and are increasingly resisted. It is likely that worsening currency as well as trade tiff’s are in the cards across the board.

The Chinese yuan is gaining internationally among users. Russia, Turkey, and Iran are making payments in their national currencies. Iran recently announced a switch from the dollar to the euro as its reporting currency. Russia and China already have a currency swap agreement that avoids settlements in the greenback. Even Saudi Arabia will have to make a choice probably sooner than later, to stay with the petrodollar fix, or go with its biggest customer – China and therefore the yuan.

China is Russia’s largest trading partner with 15% of Russia’s international trade for 2017. This year it has grown to 17.2%. In 2014 just 2% of payments for Russia’s exports to China were paid in rubles, and 9% of China’s exports to Russia were paid in yuan. In 2017, this has increased to 9% and 15% respectively and continues to grow.

There is persistent speculation and growing talk in the financial markets that Russia and China may be discussing expanding the role gold, silver and possibly other hard assets might have in realigning the value of both the yuan and the ruble independently of the US Dollar. So far it remains in the realm of rumors, then again that too is a start. Whether this remains rumor, or emerges as something more, it is a topic well worth examining if only from a risk management point of view.

There are a number of countries, which no doubt are paying close attention to what may develop. Some to join and some to try and spoil the party. However this plays out, such shifts will not be smooth or pleasant as the effects are global and will resonate throughout all financial systems, especially within the United States.

It is no secret that the central banks in China, Russia, Turkey, India and some other nations have been steadily increasing their physical gold holdings, as well as repatriating their bullion from the United States, for example Germany, and Turkey just recently this past April.

There are persistent and growing unconfirmed rumors here in Moscow that both Russia and China have formulated or are outlining plans to launch some form of a gold-participatory currency system to replace the greenback as the world’s dominant currency. Whether it will be a Ruble or a Yuan, or something entirely different is still unclear, but something interesting is no doubt afoot within this fog of speculation. Already mechanisms have been developed as potential alternatives to SWIFT, both the the Eurasian/Asia regions, and unsurprisingly as a recent development in the Euro Zone as well.

That being said I have no idea how such a system might actually look, it’s organizational profile, how it would be regulated, standardized and traded, or whether it would be a basket of hard assets (gold, silver, energy) securing it, or only gold. The key attractor for the financial world which has traditionally parked its funds in US Dollar government bonds, is if an alternative currency system is governmentally supported, asset backed and interest bearing, then the appeal of that added value and security should make such an alternative realistically appealing. It may be the single key factor which will allow any chances for real competitive use against the Dollar, Yen, Renmimbi or Euro, all of which are like the Dollar – fiat.

Backing currencies today exclusively with gold is highly unlikely; however, there is realistic potential for a new form of currency possibly connected with a state regulated blockchain crypto-currency concept, or the partial exchange within such a currency system for gold as its referenced anchor. These do have possibilities and can occur without unduly testing credulity or imagination.

The trend towards de-dollarization is happening, of that there is little doubt. Equally true is the fact that today this is just an irritant to the US government and the Federal Reserve. If implemented, it will in time erode capabilities the US can bring to bear economically, militarily and politically to all corners of the world through global financing of its dollar debt. That would be much more than just an irritation for the US. After all, according to BIS 80% of all international trade is contracted in US Dollars, it will take some time to shorten such a massive lead.

No major country currently backs its currency with gold, but many have in the past, including the US. The US effectively abandoned the gold standard nationally in 1933, silver in 1968, and completely severed any linkage between the US dollar and gold internationally in 1971. The US since then has remained a fiat money system, meaning the dollar’s value is not linked to any independently redeemable asset other than trust in the stewardship of the US government, and faith in the Treasury Dep’t and Federal Reserve to do the right thing.

Looking back, the inflection point for the US to begin dollar de-linkage from gold and similar assets was to help combat the Great Depression. Faced with mounting unemployment and spiraling deflation in the early 1930s, the U.S. government found it could do little to stimulate the economy. To deter people from cashing in deposits and depleting the gold supply, the US and other governments had to keep interest rates high, but that made it too expensive for people and businesses to borrow. Therefore, in 1933, FDR cut the dollar’s ties with gold nationally, allowing the government to print (“QE”) dollars into the economy, thereby lowering interest rates.

The U.S. continued to allow only foreign governments to exchange dollars for gold until 1971, when President Nixon abruptly ended the practice. It is worth noting that that before delinking from gold, the dollar had a fixed value reference of $35 to an ounce of gold, which limited and severely constrained financial and political policies. The value of gold was not permitted to be set by an open free market. Only after the dollar delinked from gold was the metal allowed to be openly traded as a commodity, at that time notably via the London Fix, and New York COMEX.

It is unlikely that a fully gold-backed currency mechanism will emerge onto the world financial markets as it was before 1933, especially in this interconnected economic and digital information age. However, a basket of hard assets as a reference point or linkage anchor to currencies does have traction, and may very well be what is now being discussed between China and Russia. This especially as the market can and will establish relative values indexed to the assets comprising such a basket, and not be limited to a single fixed price. This also suggests that some control may shift away from the central banks and instead become market sensitized and responsive. This can be a frightening concept, as it is a distinct departure from today’s Fed practices, requiring significant political, procedural and audit realignments.

Russia and China have been in working discussions to introduce gold-backed futures and similar mechanisms to circumvent the U.S dollar. It could be that over the next few decades we may witness the demise of fiat currencies such as the US Dollar, Yen, Euro and the debt excesses the printing of non-asset backed money has encouraged.

Currently, with geopolitical pressures, sanctions and trade tariffs increasing against Russia and China, these two countries have come to be seen as the standard bearers or ‘white knights’ for de-dollarizing global free trade. Whether they want this role foisted on them or not. This view is growing within a number of countries who have been limited and constrained from development by the dominant default role of the US Dollar, and by extension the US Government in its follow-on ability to dictate policies and pressure their sovereign national affairs in the interests of the USA.

The creation and introduction of a gold-inclusive indexed currency mechanism appears to be a likely event, perhaps sooner than we think. Russia has openly said that its national interests can be best served by reducing its exposure to the vulnerabilities and volatilities of global geopolitics by reducing the role of the greenback in its economic affairs.

Moscow and Beijing have been actively reducing their dependence on the dollar in mutual and regional trade. In October 2017, China launched a PVP payment system for transactions in yuan and Russian rubles. This means that payments for Russian oil deliveries to China, which have reached 60 million metric tons per year and continue to increase, are now working without the US Dollar as intermediary. This also has the added benefit to allow confidentiality of transactions. This is not possible if the US Dollar is used as the medium for trade as currently all such transaction details have to be cleared, therefore known in New York.

China’s launch of its own oil futures on the Shanghai International Energy Exchange plays a de-dollarization role and supports the gold-asset function as well. Today, shifting the China oil trade out of dollars into yuan takes between $600 billion and $800 billion worth of transactions out of the dollar each year.

One of the several factors supporting the creation of a Russia/China gold related currency system is that just the other day the global debt has reached $237 trillion.

The IMF warned this past week that the debt burden of the global economy is deeper today than it was before the financial crisis of 2008. The latest numbers for global debt is $237 trillion, up from the $140 trillion before the 2008 financial crisis. It is also worth noting that according to the Bank for International Settlements (BIS), there is also approximately $750 trillion in additional debt outstanding in derivatives, much of which is formally still “on the books” but practically can be considered swept under the financial rug, at least for now.

The US Treasury Department on May 1st said the government borrowed a record $488 billion in the January-March quarter. This exceeds the old record of $483 billion set in the first quarter of 2010, when all stops were pulled to prop up the financial system. The US Treasury continues to face the growing need to finance government operations when annual deficits are heading to new record levels, and a federal budget now normal at over a trillion.

Global debt has increased by roughly $21 trillion in 2017 alone. That is roughly the equivalent of this year’s US national debt. This has led to a forward-looking undercurrent of anxiety in the world’s markets, and a growing desire by some countries to do something to pre-empt being terminally caught up in these increasingly uncertain, predominantly dollar denominated risks.

The latest sanctions against Russian oligarchs and their companies, as well as trade tariffs against China are also having unintended consequences. Rusal is a major aluminum producer. They provide an estimated 6% of the world’s supply. Companies are now scampering every which way to secure new supply sources because the Russian supply might be cut off by US sanctions. The sanctions caused both the Russian stock market and the Russian Ruble to fall sharply and sent aluminum prices soaring. This simply underscores the need to create alternatives to the US Dollar sooner rather than later.

Unintended consequences certainly do not stop with sanctions against Russian companies. The dollarized trade and tariff war between China and the U.S. is also enjoying its moments in the sun. After the US imposed tariffs on China that hit aluminum products, robotics, aircraft parts, vaccines, dishwashing machines and many other items, the Chinese retaliated in turn with tariffs that hit soybeans, cars, and chemical products among others.

China’s response negatively affected agriculture products notably from the very same agricultural states that backed Trump. Aircraft parts and engines were a top U.S. export to China, totaling some $16.3 billion. Soybeans are a top agriculture product with $12.4 billion exported to China every year. Today we are expecting to see a further $200 billion in tariffs imposed on China, with an additional $267 billion package of tariffs “waiting in the wings” if the $200 billion doesn’t win China’s hearts and minds.

As this evolves, we should be seeing inflation in the US and elsewhere rather higher than the Fed’s “2% sweet spot”, in fact it may unpleasantly surprise us all.

Keeping in mind when loans are made in dollars, the debtor is then essentially a hostage, having to agree to the issuing central banks’ policies. The central bank determines the price of those dollars through politically guided monetary policy, and its (fiat) value thanks to currency printing. If such loans were issued in gold or asset-backed instruments, such counterparty pressures would lessen, or no longer be a feature.

China for many years has made it clear that gold purchased in China is to remain in China. Russia, Turkey and recently India are of the same conviction. This allows for each of these nations to be the secure custodian and guarantor of their gold assets, reducing the risk of politically motivated seizure as can happen with currencies and debt instruments.

Decisions have been acted on already by several countries repatriating their gold from the US. This is a telling sign that US control and influence is starting to shift, along with th essential element of trust that had allowed the US to play a custodial role over foreign reserves for so long.

Russia, Turkey, Iran and China are countries that are increasingly seen as threats by the West, in one form or another, and are rocking the currency boat. Various measures have been taken against them to make international trade and negotiations onerous at best. Whether through fear mongering, sanctions or trade tariffs, countries are feeling the force and weight of the US and its allies’ powers. As a result, they are increasingly considering re-enlisting gold and perhaps a basket of similar assets to shield themselves protect their financial reserves, and their ability to function as economically viable independent sovereign nations.

The process has begun, where it may take us over the coming years is the big question and one that will redefine international trade and geopolitics for decades to come. Today, after the US unilaterally exited the Iran nuclear agreement and is reimposing sanctions. North Korea and a host of other nations understandably might wonder if any agreement with the US is workable, and European allies and neighbors of the US are no doubt wondering if marching alongside America is truly in their best national interests.Trust is being frittered away quickly, and trust is what has mostly kept the US Dollar afloat in this guns & butter world. While today this possibility is still in the realm of market hearsay, rumors, and fake news – but in this increasingly curious age what isn’t?

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Orthodox Churches begin to respond forcefully to Ukrainian situation

Two jurisdictions, including one with a difficult history with Russia, move to condemn uncanonical acts in Ukraine.

Seraphim Hanisch

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Two local jurisdictions within the Eastern Orthodox Church announced their refusal to accept the legitimization of two schismatic groups in Ukraine, a move authorized by the Ecumenical Patriarch, but spurred by powers in the United States and Petro Poroshenko’s secularist-oriented Ukraine.

On October 11th, 2018, the Ecumentical Patriarch, Bartholomew I of Constantinople, authorized his legates to pronounce two schismatic Orthodox “churches” in Ukraine to be restored to canonical communion with the Ecumenical Patriarchate, and by extension, across the entire Orthodox world.

This move was strongly condemned by the authorities of the Russian Orthodox Church, which has the only canonically accepted church presence in Ukraine, a situation that the Ecumenical Patriarch himself agreed with only a few years ago.

Russia moved to break communion with the Ecumenical Patriarchate, creating a split in the Orthodox Church, but a split that at first risked Russia standing alone in their statement of disapproval of the Ecumenical Patriarchate’s actions.

For a time the reaction of the other “local” Orthodox Churches was cautious, with the vast majority (excepting only the Greek Church in the USA) coming out in support of the canonical group in Ukraine, but without taking similar action to Moscow.

That appears to be changing.

On November 12 and 16, respectively, the Churches of Serbia and Poland issued strong statements. They both categorically refused to recognize the Ukrainian schismatic groups and they forbade their clergy to concelebrate with the “clergy” within these groups. The Serbs’ statement on this was as follows:

“The Assembly does not recognize the mentioned figures and their followers as Orthodox bishops and clergy and, consequently, does not accept liturgical and canonical communion with them and their supporters.”

The Polish Church made a similar announcement, but with even more force:

“The Holy Bishops’ Council forbids the priests of the Polish Orthodox Church from having liturgical and prayerful contact with the ‘clergy’ of the so-called Kiev Patriarchate and the so-called ‘Autocephalous Orthodox Church,’ which have committed much evil in the past,” the statement reads.

According to the Polish hierarchs, persons deprived of episcopal and clerical ordination cannot be leaders in establishing peace in the Ukrainian Orthodox Church.

Only the observance of the dogmatic and canonical norms of the Church and the preservation of the centuries-old tradition will protect Orthodoxy from severe ecclesiastical consequences on an international scale. The Polish Orthodox Church prays fervently for the unity of the holy Orthodox Church and for peace for the Ukrainian Orthodox Church,” the message further reads.

And while yet officially under the omophorion of Constantinople, several Greek monasteries on Mount Athos, the Orthodox monastic republic that is the spiritual center of all of Eastern Orthodoxy, inserted special petitions in their services to pray for Metropolitan Onufry and the people of the Ukrainian Orthodox Church – that is, the canonical group that is a highly autonomous, or independent, Church while yet under the Moscow Patriarchate.

This is an interesting situation because in terms of ecclesial jurisdiction, Mount Athos is actually under the Ecumenical Patriarchate. However, the monasteries there often are known for taking the hardest of hardline stances when even their own Patriarchate takes actions they feel to be wrong:

Thousands of Russian and Ukrainian Orthodox Christians go on pilgrimage to Mt. Athos, which is under the jurisdiction of Constantinople, every year. However, the Russian Church, of which the Ukrainian Church is an autonomous, self-governing part, broke communion with Constantinople on October 15, which the Ukrainian Church confirmed yesterday, due to unilateral Constantinople’s interference in ecclesiastical life in Ukraine.

We know that the majority of the abbots of the Athonite monasteries do not agree with the anti-canonical decisions of the Phanar,” Met. Anthony said.

“In several monasteries—Greek ones, by the way—they have included a special petition in the Litany of Peace in the morning and evening services: ‘For His Beatitude Metropolitan Onuphry with his suffering flock.,’” he explained, adding, “We are very grateful to the Athonites for their brotherly love and prayers.”

This is a story that it still developing, but the recent moves by Poland and Serbia may be outlining the path that other local Orthodox Churches will take.

That move is to deny recognition to the schismatics that Patriarch Bartholomew lifted the anathemas and depositions for. If this step were to be taken by all the local Churches that have expressed support for the canonical Ukrainian Church, the result would be not much different than where the schismatics were on October 10th:

Filaret Denisenko’s group and Makary’s group would indeed have communion with Constantinople, and presumably the Greek Orthodox Church in the USA, but with no one else.

This move would be a severe repudiation of the Ecumenical Patriarch’s repeated declaration that he has the sole authority to grant autocephaly to anyone anywhere in the Orthodox world (or even to take it away), which is a canonical absurdity.

Given the substantial problems that Filaret Denisenko continues to create, such as refusing to be considered only a Metropolitan (this was the Ecumenical Patriarchate’s order), and to still consider himself a patriarch, blessing a blasphemous “icon” that is really just a monument to Ukrainian ultra-nationalism and secularism (note the neo-Nazi wolfsangel and machine guns in the upper right of this photo:

And given the ideations of Patriarch Bartholomew himself, who is also recently reported to be pushing towards creating unity with the Roman Catholic Church, while acting like a pope himself by insisting that all the local Orthodox Churches will accept his decisions, it does not look like this situation is going to go away by itself.

However, by placing the problem of the schismatics squarely in Patriarch Bartholomew’s hands (since he created the problem), the pressure created by other churches refusing to concelebrate with the Ukrainian schismatics may be enough to isolate the Ecumenical Patriarchate itself, rather than fulfilling the highly likely goal that the US, Ukraine and Patriarch Bartholomew may have had initially – to isolate Russia and create a situation where Russia is made to look like the bad guy, once again.

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Whose Money Stoked Religious Strife in Ukraine – and Who Tried to Steal It?

Was $25 million in American tax dollars allocated for a payoff to stir up religious turmoil and violence in Ukraine?

Jim Jatras

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Authored by James George Jatras via Strategic Culture:


Was $25 million in American tax dollars allocated for a payoff to stir up religious turmoil and violence in Ukraine? Did Ukrainian President Petro Poroshenko (unsuccessfully) attempt to divert most of it into his own pocket?

Last month the worldwide Orthodox Christian communion was plunged into crisis by the decision of Ecumenical Patriarch Bartholomew I in Constantinople to recognize as legitimate schismatic pseudo-bishops anathematized by the canonical Ukrainian Orthodox Church, which is an autonomous part of the Russian Orthodox Church. In so doing not only has Patriarch Bartholomew besmirched the global witness of Orthodoxy’s two-millennia old Apostolic faith, he has set the stage for religious strife in Ukraine and fratricidal violence – which has already begun.

Starting in July, when few were paying attention, this analyst warned about the impending dispute and how it facilitated the anti-Christian moral agenda of certain marginal “Orthodox” voices like “Orthodoxy in Dialogue,” Fordham University’s “Orthodox Christian Studies Center,” and The Wheel. These “self-professed teachers presume to challenge the moral teachings of the faith” (in the words of Fr. John Parker) and “prowl around, wolves in sheep’s clothing, forming and shaping false ideas about the reality of our life in Christ.” Unsurprisingly such groups have embraced Constantinople’s neopapal self-aggrandizement and support for the Ukrainian schismatics.

No one – and certainly not this analyst – would accuse Patriarch Bartholomew, most Ukrainian politicians, or even the Ukrainian schismatics of sympathizing with advocacy of such anti-Orthodox values. And yet these advocates know they cannot advance their goals if the conciliar and traditional structure of Orthodoxy remains intact. Thus they welcome efforts by Constantinople to centralize power while throwing the Church into discord, especially the Russian Church, which is vilified in some Western circles precisely because it is a global beacon of traditional Christian moral witness.

This aspect points to another reason for Western governments to support Ukrainian autocephaly as a spiritual offensive against Russia and Orthodoxy. The post-Maidan leadership harp on the “European choice” the people of Ukraine supposedly made in 2014, but they soft-pedal the accompanying moral baggage the West demands, symbolized by “gay” marches organized over Christian objections in Orthodox cities like AthensBelgradeBucharestKievOdessaPodgoricaSofia, and Tbilisi. Even under the Trump administration, the US is in lockstep with our European Union friends in pressuring countries liberated from communism to adopt such nihilistic “democratic, European values.”

Perhaps even more important to its initiators, the row over Ukraine aims to break what they see as the “soft power” of the Russian Federation, of which the Orthodox Church is the spiritual heart and soul. As explained by Valeria Z. Nollan, professor emerita of Russian Studies at Rhodes College:

‘The real goal of the quest for autocephaly [i.e., complete self-governing status independent of the Moscow Patriarchate] of the Ukrainian Orthodox Church is a de facto coup: a political coup already took place in 2014, poisoning the relations between western Ukraine and Russia, and thus another type of coup – a religious one – similarly seeks to undermine the canonical relationship between the Ukrainian Orthodox Church and Moscow.’

In furthering these twin objectives (morally, the degrading of Orthodox Christianity; politically, undermining the Russian state as Orthodoxy’s powerful traditional protector) it is increasingly clear that the United States government – and specifically the Department of State – has become a hands-on fomenter of conflict. After a short period of appropriately declaring that “any decision on autocephaly is an internal [Orthodox] church matter,” the Department within days reversed its position and issued a formal statement (in the name of Department spokesperson Heather Nauert, but clearly drafted by the European bureau) that skirted a direct call for autocephaly but gave the unmistakable impression of such backing. This is exactly how it was reported in the media, for example, “US backs Ukrainian Church bid for autocephaly.” Finally, Secretary of State Mike Pompeo weighed in personally with his own endorsement as did the US Reichskommissar for UkraineKurt Volker.

The Threat…

There soon became reason to believe that the State Department’s involvement was not limited to exhortations. As reported by this analyst in October, according to an unconfirmed report originating with the members of the Russian Orthodox Church Outside of Russia (an autonomous New York-based jurisdiction of the Moscow Patriarchate), in July of this year State Department officials (possibly including Secretary Pompeo personally) warned the Greek Orthodox Archdiocese of America (also based in New York but part of the Ecumenical Patriarchate) that the US government was aware of the misappropriation of a large amount of money, about $10 million, from estimated $37 million raised from believers for the construction of the St. Nicholas Greek Orthodox Church and National Shrine in New York. The State Department warning also reportedly noted that federal prosecutors have documentary evidence confirming the withdrawal of these funds abroad on the orders of Ecumenical Patriarch Bartholomew. It was suggested that Secretary Pompeo would “close his eyes” to this theft in exchange for movement by the Patriarchate of Constantinople in favor of Ukrainian autocephaly, which helped set Patriarch Bartholomew on his current course.

[Further details on the St. Nicholas scandal are available here, but in summary: Only one place of worship of any faith was destroyed in the September 11, 2001, attack in New York and only one building not part of the World Trade Center complex was completely destroyed. That was St. Nicholas Greek Orthodox Church, a small urban parish church established at the end of World War I and dedicated to St. Nicholas the Wonderworker, who is very popular with Greeks as the patron of sailors. In the aftermath of the 9/11 attack, and following a lengthy legal battle with the Port Authority, which opposed rebuilding the church, in 2011 the Greek Archdiocese launched an extensive campaign to raise funds for a brilliant innovative design by the renowned Spanish architect Santiago Calatrava based on traditional Byzantine forms. Wealthy donors and those of modest means alike enthusiastically contributed millions to the effort. Then – poof! In December 2017, suddenly all construction was halted for lack of funds and remains stalled to this day. Resumption would require having an estimated $2 million on hand. Despite the Archdiocese’s calling in a major accounting firm to conduct an audit, there’s been no clear answer to what happened to the money. Both the US Attorney and New York state authorities are investigating.]

This is where things get back to Ukraine. If the State Department wanted to find the right button to push to spur Patriarch Bartholomew to move on the question of autocephaly, the Greek Archdiocese in the US is it. Let’s keep in mind that in his home country, Turkey, Patriarch Bartholomew has virtually no local flock – only a few hundred mostly elderly Greeks left huddled in Istanbul’s Phanar district. (Sometimes the Patriarchate is referred to simply as “the Phanar,” much as “the Vatican” is shorthand for the Roman Catholic papacy.) Whatever funds the Patriarchate derives from other sources (the Greek government, the Roman Catholic Church, the World Council of Churches), the Phanar’s financial lifeline is the ethnic Greek community (including this analyst) in what is still quaintly called the “Diaspora” in places like America, Australia, and New Zealand. And of these, the biggest cash cow is the Greek-Americans.

That’s why, when Patriarch Bartholomew issued a call in 2016 for what was billed as an Orthodox “Eighth Ecumenical Council” (the first one since the year 787!), the funds largely came from America, to the tune of up to $8 million according to the same confidential source as will be noted below. Intended by some as a modernizing Orthodox “Vatican II,” the event was doomed to failure by a boycott organized by Moscow over what the latter saw as Patriarch Bartholomew’s adopting papal or even imperial prerogatives – now sadly coming to bear in Ukraine.

…and the Payoff

On top of the foregoing, it now appears that the State Department’s direct hand in this sordid business may not have consisted solely of wielding the “stick” of legal threat: there’s reason to believe there was a “carrot” too. It very recently came to the attention of this analyst, via an unsolicited, confidential source in the Greek Archdiocese in New York, that a payment of $25 million in US government money was made to Constantinople to encourage Patriarch Bartholomew to move forward on Ukraine.

The source for this confidential report was unaware of earlier media reports that the same figure – $25 million – was paid by Ukrainian President Petro Poroshenko to the Phanar as an incentive for Patriarch Bartholomew to move forward on creating an independent Ukrainian church. Moreover, Poroshenko evidently tried to shortchange the payment:

‘Peter [Petro] Poroshenko — the president of Ukraine — was obligated to return $15 million US dollars to the Patriarch of Constantinople, which he had appropriated for himself.

‘As reported by Izvestia, this occurred after the story about Bartholomew’s bribe and a “vanishing” large sum designated for the creation of a Unified Local Orthodox Church in Ukraine surfaced in the mass media.

‘As reported, on the eve of Poroshenko’s visit in Istanbul, a few wealthy people of Ukraine “chipped in” in order to hasten the process of creating a Unified Local Orthodox Church. About $25 million was collected. They were supposed to go to the award ceremony for Patriarch Bartholomew of Constantinople for the issuing of a tomos of autocephaly. [A tomos is a small book containing a formal announcement.] However, in the words of people close to the backer, during the visit on April 9, Poroshenko handed over only $10 million.

‘As a result, having learned of the deal, Bartholomew cancelled the participation of the delegation of the Phanar – the residence of the Patriarch of Constantinople, in the celebration of the 1030th anniversary of the Baptism of Russia on July 27 in Kiev.

‘”Such a decision from Bartholomew’s side was nothing other than a strong ultimatum to Poroshenko to return the stolen money. Of course, in order to not lose his face in light of the stark revelations of the creation of the tomos of autocephaly for the Ukrainian Orthodox Church, Peter Alexeevich [Poroshenko] had to just return those $15 million for the needs of Constantinople,” a trusted source explained to reporters.

‘For preliminary information, only after receiving the remaining sum, did Bartholomew finally give his consent to sending a delegation of the Phanar to Kiev … ‘

Now, it’s possible that the two identical figures of $25 million refer to two different pots of money (a cool $50 million!) but that seems unlikely. It’s more probable the reports refer to the same sum as viewed from the sending side (the State Department, the Greek Archdiocese) and the delivery side (Poroshenko, Constantinople).

Lending credibility to the confidential information from New York and pointing to the probability that it refers to the same payment that Poroshenko reportedly sought to raid for himself are the following observations:

  • When Poroshenko generously offered Patriarch Bartholomew $10 million, the latter was aware that the full amount was $25 million and demanded the $15 million Poroshenko had held back. How did the Patriarch know that, unless he was informed via New York of the full sum?
  • If the earlier-reported $25 million was really collected from “a few wealthy people of Ukraine” who “chipped in,” given the cutthroat nature of disputes among Ukrainian oligarchs would Poroshenko (an oligarch in his own right) have risked trying to shortchange the payment? Why has not even one such Ukrainian donor been identified?
  • Without going into all the details, the Phanar and the Greek Archdiocese have a long relationship with US administrations of both parties going back at least to the Truman administration, encompassing some decidedly unattractive episodes. In such a history, a mere bribe for a geopolitical shot against Moscow would hardly be a first instance or the worst.

As one of this analyst’s Greek-American connections puts it: “It’s easy to comprehend the Patriarchate bowing to the pressure of State Dept. blackmail… not overly savory, but understandable. However, it’s another thing altogether if Kiev truly “purchased” their autocephalous status from an all too willing Patriarchate … which would relegate the Patriarch to ‘salesman’ status and leave the faithful wondering what else might be offered to the highest bidder the next time it became convenient to hold a Patriarchal ‘fire sale’ at the Phanar?!”

To add insult to injury, you’d think Constantinople at least could pay back some of the $7-8 million wasted on the Crete 2016 debacle to restart the St. Nicholas project in New York. Evidently the Phanar has better things to spend it on, like the demonstrative environmentalism of “the Green Patriarch” and, together with Pope Francis, welcoming Muslim migrants to Europe through Greece. Of course maybe there’s no need to worry, as the Ukraine “sale” was consistent with Constantinople’s papal ambitions, an uncanonical claim to “universal” status, and misuse of incarnational language and adoption of a breathtakingly arrogant tone that would cause even the most ultramontane proponent of the Rome’s supremacy to blush.

Finally, it seems that, for the time being at least, Constantinople doesn’t intend to create an independent Ukrainian church but rather an autonomous church under its own authority. It’s unclear whether or not Poroshenko or the State Department, in such event, would believe they had gotten their money’s worth. Perhaps they would. After all, the issue here is less what is appropriate for Ukraine than what strikes at Russia and injures the worldwide Christian witness of the Orthodox Church. To that end, it doesn’t matter whether the new illegal body is Constantinopolitan or Kievan, just so long as it isn’t a “Moskal church” linked to Russia.

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U.S. May Impose Sanctions Against Turkey Over S-400 “Threat” To F-35

The United States continues to consider the S-400 air defense system a threat to its F-35 fifth generation stealth fighter platform.

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Authored by Al Masdar News:


Turkish officials have repeatedly insisted that Ankara’s purchase of the advanced Russian air defense system poses no threat whatsoever to the NATO alliance. Last month, the Turkish defense ministry announced that delivery of S-400s to Turkey would begin in October 2019.

The United States continues to consider the S-400 air defense system a threat to its F-35 fifth generation stealth fighter platform, and may impose sanctions against Ankara, Turkey’s Anadolu news agency has reported, citing a high-ranking source in Washington.

“I can’t say for certain whether sanctions will be imposed on Ankara over the S-400 contract, but the possibility is there. The US administration is not optimistic about this issue,” the source said.

While admitting that Turkey was a sovereign state and therefore had the right to make decisions on whom it buys its weapons from, the source stressed that from the perspective of these weapons’ integration with NATO systems, the S-400 was “problematic.”

The source also characterized the deployment of S-400s in areas where US F-35 fifth-generation stealth fighters are set to fly as “a threat,” without elaborating.

Emphasizing that negotiations between Washington and Ankara on the issue were “continuing,” the source said that there were also “positive tendencies” in negotiations between the two countries on the procurement of the Patriot system, Washington’s closest analogue to the S-400 in terms of capabilities.

Designed to stop enemy aircraft, cruise and ballistic missiles at ranges of up to 400 km and altitudes of up to 30 km, the S-400 is currently the most advanced mobile air defense system in Russia’s arsenal. Russia and India signed a ruble-denominated contract on the delivery of five regiments of S-400s worth $5 billion late last month.

Last week, the Saudi Ambassador to Russia said that talks on the sale of the system to his country were ongoing. In addition to Russia, S-400s are presently operated by Belarus and China, with Beijing expecting another delivery of S-400s by 2020.

Washington has already slapped China with sanctions over its purchase of S-400s and Su-35 combat aircraft in September. India, however, has voiced confidence that it would not be hit with similar restrictions, which the US Treasury has pursued under the 2017 Counter America’s Adversaries Through Sanctions Act (CAATSA).

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