Tuesday, March 18, 2014

How Sanctions Against Russia Could Signal the Beginning of ‘World War III’



Russia is preparing to fight World War III against the United States, not with conventional weapons but with the American dollar, a financial analyst told TheBlaze.
Russian President Vladimir Putin gestures after signing a treaty to incorporate Crimea into Russia in the Kremlin in Moscow, Tuesday, March 18, 2014. Putin described the move as the restoration of historic injustice and a necessary response to what he called the Western encroachment on Russia’s vital interests. (AP Photo/Alexander Zemlianichenko)

Kevin Freeman, a global financial analyst with expertise in financial warfare and terrorism, warned that Russia, along with allies like China, could cripple the U.S. financial system.
It’s not a theory but a “very real reality” that should not be ignored, he said.
“The real risk is if we go after them with economic weapons, they come back after us and this creates World War III,” said Freeman, who has consulted for the Pentagon, CIA and FBI. ”This is a very tough game of chicken that we’re playing, and Putin is serious.”
The threat of economic warfare is nothing new. Freeman, who was hired by the Pentagon as a contractor to investigate the 2008 stock market crash, believes the economic crisis was the result of a purposeful attack on the U.S. financial market by a state actor or by financial terrorists. Last September, For The Record revealed how hostile nations such as China and Russia may have been the instigators of the 2008 crash and how a system with substantial growing debt is vulnerable to such attacks.
 “Russia is playing a very good game of Chess and there’s every reason to believe that Russia has thought this out in advance,” said Vitaly Chernetsky, a Ukraine expert at the University of Kansas.It’s up to the rest of the world to decide what will be needed to stop Putin’s momentum, he said.
U.S. analysts told TheBlaze that the sanctions announced Monday against seven of Russia’s wealthiest oligarchs and politicians may not be enough to stop Putin. Some Russian leaders have even joked that these are insignificant measures from a weak U.S. administration.

“There is no doubt that Russia has been thinking long and hard about how to disrupt U.S. power and the value of the dollar in the global market,” a U.S. defense official said. “We’re mindful but I don’t think we’re mindful enough. One thing is certain the greatest threat to our stability is not a conventional war but the destabilization of our economy by an enemy.”
For the past five years, Putin has promised that he would take America’s role as the leading global financial mammoth away, vowing to create alternatives to the International Monetary Fund and the World Bank. In 2011, he criticized the U.S. debt load, saying the “U.S. is living way beyond their means and shifting a part of their weight of their problems to the world economy.”
“To some extent [the U.S. is] living like parasites off the global economy and their monopoly of the dollar,” Putin said.
Last week, the Wall Street Journal reported a significant drop in foreign central banks’ Treasury bond holdings at the Federal Reserve. Analysts said they believed the drop was a result of Russia shifting Treasury bond holdings out of the Fed and into offshore accounts so it would be able to buy or sell its portfolio if the U.S. and its European allies imposed economic sanctions over Ukraine.

Earlier this month, Kremlin economic aide Sergei Glazyev made Russia’s intentions for economic warfare very clear, saying, “an attempt to announce sanctions would end in a crash for the financial system of the United States, which would cause the end of domination of the United States in the global financial system.”
Glazyvev said Russia could stop using the dollar, creating its own payment system with “our partners in the East and South.”
In 2011, the Washington Times obtained Freeman’s 2009 unclassified report, which outlined that “a three-phased attack was planned and is in the process against the United States economy.”
Despite a final report from the federal government’s Financial Crisis Inquiry Commission that blamed the crash on such economic factors as high-risk mortgage lending practices and poor federal regulation and supervision, Freeman noted that evidence suggesting that “outside forces” likely played a role, a factor the commission did not examine.
Former Treasury Secretary Hank Paulson described the 2008 scenario Freeman investigated for the Pentagon in quotes published Monday in the BBC.

“I’m not going to name the senior person, but I was meeting with someone … this person told me that the Chinese had received a message from the Russians which was, ‘Hey let’s join together and sell Fannie and Freddie securities on the market,’ Paulson told the BBC. “The Chinese weren’t going to do that but again, it just drove home to me how vulnerable I felt until we had put Fannie and Freddie into conservatorship [the rescue plan for them, that was eventually put in place].”
Freeman told TheBlaze that if the Chinese would have become involved it “would have worsened our financial crisis.”
“We might still be digging out, and we are still digging out to a certain degree, but it would have been far worse. But, what if they dumped all their holdings; not just the Fannie and Freddie debt, but all of their Treasury debt and they got the Chinese and others to do it? Oh, my goodness!”