Multipolar Chaos, by Robert Gore

Meet the new boss, same as the old boss.

The Russian Central Bank recently announced that until the end of June, it stands ready to buy gold for rubles at the exchange rate of 5000 rubles per gram of gold. The move has been hailed as revolutionary, heralding a regime change from fiat currencies. If only that were true.

It would be revolutionary if the Russian Central Bank made a two-way market in rubles and gold. Sellers of gold to the central bank will get back rubles, but no one can exchange rubles for gold. The ruble will still be a fiat currency. A central bank or government that sold gold for its own currency at a fixed rate would be returning to the gold-exchange standard, which prevailed in many nations during much of the 1800s and early 1900s. Right now, such a move would be so revolutionary it would upend the global financial order.

A reminder: Government and Central Bank-Led Revolutions is a book whose thickness is measured in nanometers. Traditionally, revolutions are directed against them. Under a gold-exchange standard, you don’t need a central bank, which is why monetary bureaucrats hate it. You need a gold repository and someone to print the gold-backed currency. Politicians hate it because they can’t spend currency they and their central-bank flunkies have wished into existence. If they had to spend real money—gold or silver—it would be bye-bye welfare and warfare states, and they would be the inconsequential hacks they’re supposed to be.

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Since the end of the gold-exchange standard, during the reign of central banks and bankers, we’ve had two world wars (and the third may have begun), a massive transfer of resources from the productive to the unproductive, and a proliferation of government promises that will never be kept. Cheap credit has promoted private indebtedness, kept zombies companies alive, blown up asset bubbles, and diverted economic activity from production to finance.

If the Russian Central Bank buys gold, what effect will that have on the life of the average Russian? It has thousands of tons of gold already; the additional gold will do for Ivan and Natasha what the present stockpile does: nothing. For them, Russian government gold is a pet rock. The same can be said about the usefulness of the American and Chinese governments’ pet rocks for their citizens.

It’s nifty that some movers and shakers are recognizing that gold is better than fiat currencies, whose value derives from promises by politicians and central bank bureaucrats not to create too much of them. That recognition comes from the many centuries gold has held its real purchasing power and myriad fiat currencies have not. Unless and until gold becomes the monetary basis of an economy, putting it in a government vault has little practical value, although it may give hope to holders of that government’s fiat currency that someday the currency might be backed by gold.

While the Russian move highlights the shaky state of Western fiat currencies and debt—never a bad thing—it doesn’t move the needle at all in terms of the freedom enjoyed by individuals. In fact, if the poobahs of the Eurasian alliance have their way, the needle moves in the opposite direction. Pablo Escobar recently interviewed Sergey Glazyev, Russian Minister in Charge of Integration and Macroeconomics of the Eurasia Economic Union (EAEU).

Over a decade ago, my colleagues at the Astana Economic Forum and I proposed to transition to a new global economic system based on a new synthetic trading currency based on an index of currencies of participating countries. Later, we proposed to expand the underlying currency basket by adding around twenty exchange-traded commodities. A monetary unit based on such an expanded basket was mathematically modeled and demonstrated a high degree of resilience and stability.

“Exclusive: Russian geo-economics Tzar Sergey Glazyev introduces the new global financial system,(LINK)” Pablo Escobar, The Saker, April 15, 2022

A new global economic system and a new synthetic trading currency based on an index of fiat currencies and twenty exchange-traded commodities, all computer-tested by mathematical modeling—what could go wrong? Why not add the phase of the moon? Another reminder: The History of Successful Government-Imposed, Multivariable, Extremely Complicated Programs is a couple of nanometers thick. The chapter concerning such programs imposed by not one but many governments working together is especially thin.

Calling Sergey Glazyev a geo-economics Tsar gives the game away. Meet the new boss, same as the old boss: government. Whether they hail from Moscow, Beijing, Washington, London, Paris, Brussels, or anywhere else government functionaries and their toadies reside, belief in government—and its command and control (C&C)—reigns supreme. Nonstop propaganda reinforces belief among the subjugated. Dissenters are ostracized and punished.

But dissent we must. As the U.S. government’s hegemonic aspirations crash and burn, assuming the rest of the world isn’t incinerated, Russia and China will consolidate their power over Eurasia. To think that the initiatives they spearhead is an exercise in munificence rather than domination and power is allowing hope and delusion to triumph over experience and reality.

Putin and Xi are C&Cers to the core. They’ve risen to the top of top-down systems and they intend to stay atop their Eurasian confederated alliance. Power is a jealous beast, and these Best Friends Forever may one day decide they don’t like sharing the throne. Or perhaps they won’t, but their successors will. Regardless, there is the conceptual flaw at the heart of their Eurasian alliance: that progress flows down from the government and not up from the people. Throughout history, governments have built all sorts of things, and most of them have been about as useful as Egypt’s pyramids.

Notwithstanding that inconvenient truth, infrastructure has become a magic totem: if governments build it, progress and prosperity will come. No profit is required of such infrastructure, unlike what private parties build. Instead, we all get to bask in the glow of job creation, social benefit, synergy, development, and whatever other heartwarming terms are invoked when governments spend two dollars, rubles, yuan, or Glazyev currency units for one dollar, ruble, yuan, or Glazyev currency unit of tangible benefit.

Conveniently for the Belt and Road crowd, nobody will be toting up costs versus benefits. C&Cers are allergic to accountability. No one in China, including its rulers, knows whether the trillions of fiat yuan “invested” (a globally favorite euphemism for government spending) the past few decades in infrastructure, dams, bullet trains, high-tech weaponry, research, development, and whatever else has been worth it.

All that investment is counted as growth under conventional GDP accounting and hailed as “Chinese Miracle,” but much of it has been bought on non-miraculous credit. Good luck trying to figure out either the total tab or where it resides within China’s financial system. Chinese government accounting is as inscrutable and opaque as say, U.S. defense and intelligence accounts (which have never been audited).

Speaking of the U.S., even if its C&Cers were to give up the empire—which they won’t—and accept the reality of what’s called multipolarity, as long as those multiple poles are just various governments doing their C&C thing, the global bull market in chaos has a long way to run. There are enormous consequences from all the C&C we’ve suffered so far; multipolar C&C will merely compound them.

Biden’s string pullers won’t let their splendid little Ukrainian war and sanctions go away any time soon, even as they destroy the U.S. currency and economy. Cutting through the propaganda is problematic, but apparently Russia is slowly attaining its military goals, taking control of southern Ukraine and the Black Sea coast, and the eastern Donbass region. Western sanctions and Ukrainian insurgency will be Putin headaches for years.

Connoisseurs of chaos have been bedazzled by the potential addition of Finland and Sweden to NATO. Finland has over eight hundred miles of border with Russia. Will Putin be any more accepting of his formerly neutral neighbor joining the Western alliance than he has been of Ukraine’s potential membership?

Finland hasn’t been the doorstep for invasions of Russia that Ukraine has been; it’s too far north. However, since World War II it’s had a modus vivendi with Russia that NATO membership would destroy, especially if NATO moves in military forces and weapons. That would be a compound migraine for Putin, and we all may end up feeling his pain. It makes one long for an investable index of chaos, which would be a guaranteed winner that might even outpace inflation.

The reality of fiat debt and currency is that their production has outstripped the production of goods and services upon which they have an ostensible claim. They may give way to debt and currency regimes linked to commodities and natural resources. Like previous regimes these will be imposed by one or more governments. Inevitably, they will fail. As long as C&C are the order of the day, such regimes will come and go. They stifle the greatest resource of all, the one that gives every other resource its value—the unfettered human mind.

We don’t yet understand the pathological psychology of those who seek power; it has barely been studied. It is safe to say that people rather than physical reality are the object of their attention and efforts. There is little to no overlap between power seekers and those who discover, create, innovate, build, and produce, who deal in the realm of physical reality. The former are often overtly hostile to the latter, and they will not allow anyone to proceed unfettered. The power seekers’ dream is the mind subservient to their whims and dictates.

Which is a nightmare for the rest of us. The theme of history has been the never ending effort to control, channel, enslave—and when the hostility is fully unleashed—destroy the mind and its products. Propaganda, censorship, suppression, Kafkaesque law, horror, mayhem, and death are the defining features of the war on the mind. In benumbed bewilderment, most people accept the grotesquely abnormal and do not challenge totalitarian plans to impose an even more grotesque “new” abnormal.

Ayn Rand said: “We can evade reality, but we cannot evade the consequences of evading reality.” The consequence of the war on the mind is chaos. To understand and deal with reality, minds must be free. Not a single square inch of the earth’s surface is free. Today’s global chaos is the consequence, the tangible outcome of the malignancy besetting the minds of those who’ve made power their god.

Humanity awaits the revolution that rejects their reign, that claims and defends each individual’s right to life and freedom. Questions are the mind’s first line of defense in the war raging against it. Start with this one: why should a few exercise power rooted in violence and fear over the many, who could quickly overthrow them if they acted together?