The author's preface. What is State sovereignty?

Many extraordinary events have taken place lately in different parts of the world. The Arab Spring, the collapse of multiculturalism in Europe, youth riots in major European countries and the 'Occupy Wall Street' movement are just a few examples to mention. The world is changing rapidly. What is more, these changes are clearly not for the better. All those things that were clear, secure and solid yesterday are now becoming unstable. The international financial system is falling apart at the seams, and that can be seen with the naked eye. Just ten years ago those who would speak of the dollar crash or of the Euro-zone decay, would perhaps have been regarded as insane and would have been recommended to see a doctor. Now these matters are discussed night and day on all TV-channels. This news is on the front pages of newspapers.

Let us look at ordinary people. What should they think of these events? Should they applaud the victory of the opposition in the Arabic countries and the establishment of democracy there? Or rather worry about the defeat of government forces and growing instability? Should they sympathise with the youth riots in the developed countries or rather regard these young people as just having too much of a good thing? Or, maybe, they had better simply forget about all that and go to see a football game? But even there they will come across football fans, nationalists, tolerance issues and many other unpleasant things? And finally – consider the conspiracy theories about the end of the world and the aliens. So, what should they do? Let us look at it more closely.

And we should start with state sovereignty. Without this concept we will never grasp the essence of what is happening…

There are currently over two hundred states on Earth. These states are very different, just like human beings are. There are large and small ones, rich and poor ones, famous ones and completely unknown to the majority of the world's population. Among these nations there are those with advanced economies and those with decaying ones, those growing and those wasting away. Some die out, some grow older, and others are propagating vigorously and growing younger year by year. So, what is this factor that determines whether a nation is developing or stagnating?

Let us compare it with the factors, influencing the life of a human. Those are plenty: parents and upbringing, attitude of a person towards the things they are busy with, their love of learning. Health is important and even one's birthplace has certain significance. One cannot ignore friends, bad habits, luck. Happy or unhappy marriage plays its role, too. All in all, it is a mosaic of accidents that determines the life of a human being. And so, people live, get older and work following the waves of destiny. They pursue their goals. Or – which also happens – they sink to the very bottom.

But there is one sine qua non condition of the phenomenon called human happiness. It is not by chance, that I address happiness in this context, since it is happiness, which has to be the criterion of human existence; happiness, and not success, interpreted differently in different cultures. Human happiness presupposes autonomy. One has to make decisions by oneself; one has to carry responsibility for the consequences of those decisions. In the same way the 'happy life of the state requires this state to be autonomous. This self-determination of the state is called State Sovereignty.

State sovereignty means supremacy of the state within its borders as well as its autonomy in the international affairs.[1] State sovereignty is incompatible with any interference from the outside. A sovereign state is the one to decide for itself and to reap the fruits of these decisions. The country itself has to determine its path of development; the head of the country has to do things that are good for the country and that make the country prosperous. The power is sovereign only if this criterion is chosen as the basic one for defining of state policy – exactly as an adult is independent only if they are free to decide themselves about their family. It may happen that the benefits of certain decisions will not be immediate, and will not always be obvious; yet the criterion 'make it better' will always guide a normal person in actions concerning their family.

Is this not the case of modern states as well? Is this not the case that the statesmen of different countries are striving hammer and tongs for the sake of their countries? Is this not the case that while looking at the political map one sees a lot of independent countries that bravely move across the rough sea of politics and economics?

Alas, it is not; the reality is completely different. It is exactly the opposite. Nearly all countries of the modern world are forced to conduct policies that are very far from their national interests. The examples are not hard to find, you will find them in today's newspapers. What do Poland, the Czech Republic and Bulgaria need the deployment of the American antiballistic missile elements on their territories for? Do they need it to defend themselves from the missiles? I would like to highlight two points in this context. Firstly, these countries are NATO members, and this alliance, where the USA and Britain rule the roost, has, in compliance with its regulations, to protect them from any military attacks. Secondly, it is not very clear whose missiles these countries are going to defend themselves from. Some say that this refers to Iranian missiles. Yet for some obscure reason the ABM is being deployed closer to the Russian borders than to the Iranian ones. Whereby would it not be more logical to deploy the system in the proximity of the hazard and not in another part of the planet. Furthermore, the Iran of today simply does not have missiles which would be capable of reaching Poland or the Czech Republic, and it is not clear when Iran will get such missiles. Maybe the ABM is being deployed in Europe 'just in case'? In case Iranians invent, assemble and launch a missile of the newest generation?! Well, let us suppose, they have indeed invented one. And even have assembled a couple of dozens. The questions remain the same – why should Iran immediately attack somebody? Why should Iran aim at Poland – or the Czech Republic? What harm did these or other Europeans – such as Romanians or Bulgarians inflict on Iranians? The questions hang in the air, and the things, mentioned in this context by American politicians resemble a smokescreen.

As for today, the probability of Iranian missiles attacking the West is the same as that of aliens landing in California.

The benefit to Eastern-European countries from these actions is questionable, to say the least. Their security will not develop whereas they will inherit a lot of problems. As a matter of fact, the positions of the American missiles will be immediately exposed to attacks of Russian nuclear warhead missiles. On the other hand, it will be impossible to track what kind of rockets Americans shelter in the launching silos. Who can guarantee that these missiles are just an air defence weapon? What if they are equipped with nuclear warheads, too? Indeed, the proximity of the missiles to our borders drastically reduces their flying time to Russian towns and strategic objects. It was exactly the argument that made American diplomats so eloquent during the Caribbean crisis – yes, it would have taken just a few minutes for a missile to attack the USA from Cuba. So, today's Russia cannot help reacting either. As a result, people living in Poland and the Czech Republic who gained nothing from deployment of the American ABM in terms of security, now risk coming under the crossfire of Russian nuclear missiles. So what is that big reward for these countries, can anybody explain to me? Well, the leaders of these countries will be tapped on the shoulder during the next summit meeting and will be titled 'democrats' by human rights activists. It does not sound like a very generous reimbursement for the constant fear of being attacked by nuclear missiles, does it? Would you settle for putting a barrel of petrol in your own apartment to get a discount for your rent and a tablet on your door with the inscription An excellent household apartment'? No? Then that is not the point.

The questions arise one by one. Are the leaders of these countries, who jeopardise their citizens without gaining anything worthy instead really freestanding? Are they really freestanding, those masking their misconduct with talks about some hypothetical threats corresponding to nothing in reality? The answer is evident – no, they are not. And that means that the country behaving in such a strange way has no sovereignty. In the modern world only a very small number of countries can proudly claim Absolute State Sovereignty. It has always been the case – there have always been those who drive and those who are driven, mother countries and satellites, seniors and vassals, slave-owners and slaves. Nothing changes but the style and the pattern of the curtain which hides this uncomfortable truth from the majority of the population. The states enjoying the sovereignty in its full range can be counted on the fingers of one hand. Normally the situation looks as follows: the state has its flag and its president. And that is it! These are the alpha and omega of the sovereignty of some 'proud and independent' country. Deeds, words and acts of this state are imposed by its 'partners'.

In 1985 these sovereign countries were the USSR, the USA, Great Britain and China. All the rest had to more or less coordinate their steps with the 'big brothers' whose struggle against one another formed the main subject of the world politics. In just a few years' time, the reality looks far less promising for us. Today the Absolute State Sovereignty is maintained by Great Britain and the USA, two world powers forming the skeleton of the policy-makers, and China, which stepped in the shoes of the USSR, and which is now the country with the world's highest rates of economy growth.[2] Did we miss anybody in our list? I am afraid not. Todays Russia is not among the countries with the Absolute State Sovereignty. Our country enjoys only a restricted, partial sovereignty, the acquisition of the Complete State Sovereignty is the object of the unseen struggle carried out at the moment. Sometimes this struggle spills over onto TV-screens and the pages of newspapers in the form of news of the next terrorist attack or the 'earthshattering' international meeting.

The internal problems of today's (as well as of yesterday's, though) Russia derive directly from the loss of the Complete State Sovereignty. Before we find out when we lost it, we have to clarify the terms. So, what is the Complete State Sovereignty?

It consists of five different sovereignties:

1. The recognition of the territory of the country by the international community, the flag, the national emblem and the national anthem.

2. The diplomatic sovereignty, implying the ability to pursue an independent international policy, which means that the state should be free to choose its own friends and its own enemies. If you are on good terms with Iran, you will never care that the power in this country is held by the Ayatollahs who are not popular in the USA. You can punch the aggressor in the face and you need not worry that this aggressor is the democratically elected president of Georgia.

Once the diplomatic sovereignty is achieved, objective processes start immediately and dictate the necessity of obtaining two further sovereignties. It is a well-known fact that military power and a strong economy are the only factors the diplomats have real respect for.

So, the third and the fourth sovereignties will be:

3. The military sovereignty – the ability to rebuff an aggressor and to provide security for yourself and your allies;

4. The economical sovereignty – the economical and industrial development, providing for further advancement of the country out of its internal reserves.

Is that all? No. There is also a fifth sovereignty, and as our history instructs it is the most important one. The lack of this is the first step that leads into the abyss.

5. Cultural sovereignty.

Let us refocus. Solely in the case of all five sovereignties being present is it possible to speak about the Complete State Sovereignty. If we consider all the modern countries from this point (or reconsider the history), we will immediately notice that practically every country lacks one or several of the abovementioned points. For instance, today's Germany doesn't have military sovereignty. German armed forces amount to ca. 250 thousand people.[3] Here it can be recalled that by the time Hitler came to power in 1933, the effective strength of the Weimar Republic's army had reached 100 thousand people, with which Germany was considered completely disarmed, as good as having no army at all! Yet at the time when the country of beer and sausages was full of strength and was actively developing, the corresponding figures were radically different. Just before the First World War in 1914, the peace-time strength of Germany was 801 thousand people. Is this an argument indicative of the German aggressive character? No. In the same year, France had the disposal of a regular establishment numbering 766 thousand.[4] Today, the population of Germany amounts to 83 million, i. e. it has grown by 20%, and its army in comparison with 1914 has shrunk to a quarter of its size.[5] What does it mean? Nothing but the lack of military sovereignty in Germany.

Yet if anybody stated that a large army in today's world is an anachronism, I would refer to the article concerning the US Secretary of Defence, Donald Rumsfeld, just to give them a general idea of manpower of the American Army: 'Currently the armed forces of the USA amount to ca. 2.6 million men and women, from which 1.4 are on the active service, 876,000 of guardians and reservists are in the military bases, and 287,000 form the special trained reserve.'[6] Why then is the US so reluctant to reduce its huge army, even given the enormous yearly budget deficiency?[7]

It is because a strong army is the sine qua non condition for having Complete State Sovereignty. And equally importantly, it is a possibility for one country to deprive other countries of their sovereignty at its behest, exactly as the USA has done with Iraq, and as it has done with Yugoslavia.

The rules in politics would never change, just as the desire of street boys to be strong and muscular so that nobody could offend them. Germany has a small army because it has delegated a part of its sovereignty to NATO and 'personally' to the USA. Germans have no military sovereignty, and therefore no diplomatic sovereignty, whereas their economical sovereignty is evident. The German economy is the biggest in Europe, and Germany is the top GDP country of the euro-zone. So, why does Berlin send its soldiers to Afghanistan? Because Berlin is not allowed to act otherwise. What do German soldiers have to look for in Afghanistan? Do the Taliban endanger the security of Germany? No, the reason is different. The USA and Great Britain invaded a country of major strategic significance under the following contrived pretext; Afghanistan borders on Pakistan, Middle Asia (i.e. Russia), Iran, China and – over the little stripe of the Pakistan territory – with India. While there, the Americans get the opportunity to trouble quite a number of their political contestants. That is exactly why after Americans and the British came to Afghanistan, the drug production that had nearly been eradicated by the Taliban, was resumed, and what is more, on a massively industrial scale.[8]

This is not purely coincidence. Drugs mean a possibility to kill the young of Russia, Iran and China. Drugs provide an excellent excuse to place these countries under one's control. Drugs mean corruption, which is one step away from the betrayal of one's own country. Drugs mean networking with the dregs of society, with its feculence, with people who are willing not only to import and sell the deadly potion, but also to organise the terrorist act and assassination as well – just for being paid.

The interests of the USA are clear to us. But what about the Germans? Why on earth are they in Afghanistan? And Italians? And Estonians, and Latvians? I will not even ask about Estonian and Latvian soldiers – the matter is abundantly clear. Our Baltic friends had never had the real sovereignty – and will never obtain it. But Italy and Germany? From the first glance these countries are self-sufficient and sovereign. But, alas, they are not free to stop sending their soldiers to this senseless war! While studying history and politics, please, keep in mind a simple truth: the ownership of a flag and an emblem per se counts for nothing. Never be surprised if a country acts against its own interests. The simple fact is that this country does not have a real autonomy.

So, let us check, what the situation with all compounds of the Complete State Sovereignty looked like in different years in our country.

What did we have in 1952? In this year all five sovereignties were present:

? recognition, flag, emblem and anthem were present;

? the diplomatic sovereignty – the ability to conduct an independent international policy was disputed in arms during the Great Patriotic War;

? the military sovereignty was present – the USSR did not stand behind its contestants; every effort was exerted for production of nuclear weapons;

? the economical sovereignty was present – the food-coupons were abolished, the country was recovering;

? the cultural sovereignty was present: songs, values, cult-figures – all of them were of Russian provenance.

In 1980 only four sovereignties were left:

? recognition, flag, emblem and anthem were present;

? the diplomatic sovereignty – the ability to conduct an independent international policy was present;

? the military sovereignty was present – the USSR still did not stand behind its contestants, having joined the armament race, adhering to the law of the talion, rather than to the principle of sufficient cause[9];

? the economical sovereignty was present – food shortages occurred, but nobody went hungry.

Yet the cultural sovereignty had vanished: everyone was chasing after the foreign rags and chewing gum. The West – is the 'regent of dreams'. The West was considered something advanced, whereas our own country was disrespected as a backward 'sovok' (from 'soviets').

It is the loss of cultural sovereignty that became the starting point of the tragedy of Russia – the USSR. We started with losing our cultural sovereignty under Khrushchev – Brezhnev, then the military sovereignty under Gorbatchev. Unilateral reductions of the newest missiles, withdrawal of troops everywhere and the termination of the Warsaw pact[10] are the hallmarks of this process. As a result, the economical sovereignty shrunk immediately, instantaneously. Ration books and coupons emerged; the life became dependent on the credits from the West. The gold reserve of the USSR disappeared without a trace. The 'gold of the communist party' was hunted for by the democrats, whereas they never cared for the 'Gold of USSR'. Because the only place where this gold could have gone was the West. There were no other possible destinations.

And finally, the last thing we lost was the diplomatic sovereignty, as the destiny of the country was decided not within but without the country's participation. Yet the process of demolition did not rest there. The subsequent shameful dissolution of the USSR with violation of all thinkable laws, the notorious agreement in Belavezhskaya Pushcha (Bialowieza forest) was the bottom-line of a complete loss of the diplomatic sovereignty. The freezing point had been reached. Immediately after the session, as three politicians who had violated the results of the referendum on retaining of the USSR decided to dissolute it, Boris Yeltsin dialled Washington and reported what had happened![11] Just like in the TV-game 'Who wants to be a millionaire?' – the first call is to the friend!

And after you have lost everything – what do you need your life for? And so the USSR vanished literally a few days after it had lost the remnants of its sovereignty…

By 1992 all we had was the international recognition:

? a beautiful flag, emblem and the recognition by the West of the new – strongly curtailed – borders of our country;

? no diplomatic sovereignty left – Russia gives up all its friends just like that – for patronizing compliments on its steady move towards democracy;

? no military sovereignty left – we started disarming unilaterally;

? there was no trace of the economical sovereignty – the country could supply itself with nothing, the whole industry was being sold out at no price;

? no cultural sovereignty left – we were actively talking over foreign values.

Yet Carthage shall be destroyed, shall it not? Wiped off the map. So the process of our sovereignty should have been brought to the final point, and this final point should be the complete decay of the country. By the end of the nineties that proved to be a terrible reality: the Ural republic under Eduard Rossel – the republic with the completely autonomic state structure, as well as numerous presidents of the autonomy republics and districts were already present. By 1999 Russia's sovereignty was reduced to a flag, emblem and the internationally recognized territory. It is this fifth sovereignty that we were sentenced to be deprived of. It would have meant a break-up of Russia into minor states; it would have meant a war and chaos. The signal for this scenario was given by Basayev's invasion of Dagestan. The country was completely ready to be surrendered. Yet it was not…

The turn of 2000 marked the beginning of the gradual restoration of the Complete State Sovereignty. The previous process had been reversed. What was lost last was regained first. The whole thing began with restoration of diplomatic sovereignty, i.e. with the second Chechen operation. I am speaking about the right of the country to have control over its own territory, whatever the opinion of the international community may be. I am speaking about maintaining friendship with those countries, whose friendship is profitable for Russia. I am speaking about repelling an aggressor in the South Ossetia. Let us face it – it was not the Georgian president but the USA standing behind, who was chinned by the Russian troops. With my own eyes I saw reports from the South Ossetian capital… a corpse of a black soldier in the NATO uniform. It was shown a couple of times – then these shots disappeared from the broadcast. A military advisor, killed in the battle. It is not by chance, that in the Soviet tanks, that had been in arsenal of the Georgian army and were captured in Tskhinvali, the labels inside the machine were written in English…

By 2011 we had:

? recognition, flag, emblem and anthem;

? partial diplomatic sovereignty – we have to bargain with the USA and act with caution on it;

? the military sovereignty is being restored, this process may be slow, but it is talking place;

? we are still missing economic sovereignty.

The cultural sovereignty still stays out, yet it is on the rebound. Like after the cruel disease we come to ourselves, recover from amnesia and finally realize how meanly we were deceived by the 'perestroika foremen'. Once again our youth starts to be proud of our country. Patriotism has apparently grown in the last ten-fifteen years; the times when our tourists felt ashamed to confess that they are from Russia, are over. This does not sound like a huge progress, does it? No, it does not, the progress is indeed very little. Annoyingly little. Yet the direction is right, however slow the tempo may be.

The objective of the management and the government of Russia shall be acquisition of Complete State Sovereignty of Russia.

How can we get rid of the deficiency of State Sovereignty? How then to restore the Complete State Sovereignty? The road out of trouble is the same as that into trouble, yet travelled in the opposite direction. We see that the restoration of Complete Sovereignty involves all five components of sovereignty. Now we have got the first, the second (nearly), the third and the fifth ones. The matter depends on the fourth sovereignty – the economic one. In order to achieve something, one has to have a clear understanding of what one wants to achieve. The structure of today's world is a financial one par excellence. Today's chains consist not of iron and shackles, but of figures, currencies and debts. That's why the road to freedom for Russia, as strange as it may seem, lies in the financial sphere. Today we are being held back from the progress at our most painful point – our rouble. Exactly in the same manner as the lack of sovereignty had formerly been symbolised by the enemy soldiers in the streets of our towns, now the defeat of those towns is testified by the enemy's currency, which is entirely soft. As our sovereignty was threatened by the enemy's soldiers, we had our army to oppose this threat. Today the enemy's soft currency shall be opposed by our, Russian currency.

Here I anticipate a reasonable question: is this currency not ours anyway? Does the rouble not belong to us? Well, our rouble, the Russian currency unit, is – just to put it delicately – in a way, not quite ours. And this situation is the most serious obstacle to our country's development.

Let us examine this situation.

1

About the Federal Reserve System and the non-Russian Central Bank

What do we know about the world around us? Only what we see, hear and read. Knowledge comes together with information and knowledge is followed by understanding. Everyone deals quite well with everyday problems. Everyone knows that if the sky is overcast with clouds, it is going to rain. And that means that one should take an umbrella or not even leave home in the first place. Any adult knows that if food is left on the table, and it is warm in the room, it will go off. Everyone knows not to put fingers into a socket or jump off high buildings onto driving cars, like Hollywood film characters. But there are fields of human activity where practically no one understands the way things work. And I do not mean nuclear physics or the structure of Universe. I mean the sphere that nearly everyone uses, knows of it existence and yet will not be able to answer even the simplest questions regarding the way it functions.

Maybe, ordinary people do not even need this understanding? Why burden oneself? We do use TV sets, microwave ovens and digital cameras. But when asked how an image can be transferred with the help of numbers, or what waves rage in that little box and make things warm up, few people will be able to give a coherent answer. It is not that things feel more useful if we do not know how exactly they work, is it?

Yes. Heating up a sandwich without knowing how a microwave oven works, is possible.

Yet establishing a prosperous state while not understanding the principles of the modern world order is impossible. Similarly, all attempts to build one's own prosperity in a world where everything is in accordance with definite, logical but concealed laws, not knowing the basic principles of today's world, would be like sand castles. The rules are set, the game has been on for a while. But no one announces the rules. On the contrary, other players are trying to convince us that we are competing in ballet, while it is actually ultimate fighting. Imagine the following situation: a tennis player has arrived at a competition. He is holding a racket, wearing a baseball cap and he has tennis balls in his pockets. And only when he is already on what should be a tennis court, he realises that it is not a lawn but ice, as at an ice rink. And his opponent looks a bit strange: he is wearing new skates and a helmet and is holding a stick. How long can the tennis player withstand the hockey player if they are actually playing hockey?

The conclusion is easy to make: one must understand what game one is playing, who the opponents are and what the rules are. Otherwise, one is bound to be defeated. Otherwise, at a national level one can easily play Gorbachev's part. He became the best German of all times and ruined his own country at the same time. He helped Germany reunite and a year later tore his motherland apart![12]

One has to be an idiot to cut down the size of the army and reduce the weapons in exchange for beautiful promises![13] And all of this served under the pretty sauce of 'world peace', 'disarmament' and 'elimination of the nuclear threat'. Everything was given up. The leaders of the USSR gave up the country's allies, its army its bases and then the country itself was given up as well as its citizens who all of a sudden found themselves in what was now a foreign country. And what happened in the end? Did the world become more secure? Did the main opponent, the USA together with NATO, disarm? How much blood has been shed in wars since then?

This is what incompetence and lack of judgement in political leaders may cause. Their good intentions to establish peace for everyone lead to wars and catastrophes because rivalry and political struggle were never cancelled. And therefore there is a sphere that everyone needs to understand, even if it seems too difficult and one does not feel like it. Even if one does not want to think about it or it is hard to believe in it. Because common ignorance will eventually concern everyone, and even if it does not concern yourself, it will concern your children. In any form. In the best case scenario, ordinary people will buy dollars as they get more expensive again and will start selling euros when they get cheaper. For their future retirement allowance they will buy shares that by the time they actually retire will cost nothing. In the worst case scenario a tank strike will shatter their house and an explosion in the underground will take their lives or health…

Politics and finances. These are the spheres of human life that require knowing at least the basic principles, otherwise it may incur real damage to human life. Finances today have brought politics to heel, have replaced politics with themselves. Not understanding this sphere may destroy peoples and countries. Today's world is based on finances, it lives among finances and is controlled by them. Therefore, dear reader, you will have to examine modern currencies. There is no moving on without it.

The financial world is not a group of geeks in front of computers, it is not polite clerks in banks and not even traders at stock exchanges. The financial world is aircraft carriers, nuclear-powered submarines, tanks, fighters and helicopters. It is infiltrators and assassins, snipers and spies, politicians and public figures. And all of that is only needed to preserve the existing financial order of the planet, to retain their dominance and even assert it. The most interesting thing is that despite clear physical signs of such world order, most people do not even have a slightest idea how everything functions. And those who dominate, those who created this theatre of the absurd, need exactly that.

In order to understand what is happening around you today, you have to realise three things, and they should be understood in combination.

1. The keystone of the modern financial world is the dominant part of the dollar. That means that all prices in world economy are only defined in dollars. Oil, gas, gold, aluminium etc. are only sold for dollars. All natural resources, all metals and all their derivatives. That means that it is in dollars that prices for production are defined. To put it short, everything, nearly everything that is sold at the global market, is only sold for dollars. This is how world economy works. If you want to buy gas or nickel – get your dollars out. It is impossible to buy them for euros or Norwegian Kroner. You have to exchange your currency for dollars. And that means creating extra demand for them.

And that is not all.

2. Not only is the dollar the main means of payment in todays international trade but it is also the main means of savings. And by that it is not private savings of people around the world that are meant but savings of countries themselves. The so-called gold and foreign currency reserves. Whichever country you take – it will have less gold in the reserves than currency[14] Therefore it would be more sensible to call such reserves foreign currency and gold ones.[15] But you had better get used to it – in the financial mirror-world all terms are designed to confuse the situation rather than make things clear.

3. It is not the United States of America but a private institution called the Federal Reserve System of the USA that issues the main currency of the world.[16] Private initiative has nothing to do with it. The US dollar just does not belong to the USA. The fact that the dollar is issued by a private institution is even stated on the dollar bill. But who reads that? Meanwhile, it says everything quite clearly. No one hides anything. American money says nowadays: Federal Reserve Note.

You are not holding a US dollar, you are holding a dollar of the Federal Reserve System.[17] But this strange situation has not always existed in the USA. It will soon be 100 years since the American government decided to privatise emission of the dollar. The Fed was established in December 1913, when President Wilson signed the Federal Reserve Act.[18] When money was issued by the Government and not by a private institution, dollar bills said a different thing: United States Note. Can you feel the difference? There used to be state money (bills) and now there is corporate money (bills). But, alas, there is no state money in the USA any more.

Even on the Federal Reserve official website you will find public information about its private nature: The Fed is a mixture of public and private elements.[19] This phrase is rather misleading – a bit like what they say about mixtures of raisins and nuts. Can such a phrase be found on a governmental institution website? Say, at the US Navy website? Or on the US Air Force website? Even the National Guard cannot say that it is a 'mixture of public and private elements'. Because the army, navy and police in the USA, as anywhere in the world, are run by the state. Whereas the organisation that issues American money is not. We do live in a strange world! Although, what is so strange? Who controls the wallet controls everything.

You can often hear statements that the Fed is controlled by the US government, which, allegedly, makes it a state organisation.[20] Refuting this statement is very easy. All it takes is to look at the founders of this institution. The Fed was established by twelve Federal Reserve banks scattered across the USA. It would seem that the Fed is a federal organisation since it consists of federal banks. But this is just a facade, a mimicry. There is not a single state-run bank in the USA! All the banks that have the word Federal in their names, were actually established by ordinary commercial banks which had been grouped according to their location. And who are the founders of American commercial banks? Via a chain of companies, shares, trusts and funds, it is always INDIVIDUALS. Therefore, the twelve Federal Reserve banks comprising the Fed are owned by unknown individuals, and not the American state. And each of these twelve Federal Reserve banks has the right to issue dollar bills.[21] If you are curious, you can take a note you have and read where it comes from.[22]

For an outsider, all proprieties are observed. An illusion is created that the Federal reserve is controlled by the state, although it is actually independent. It is about the independence of the Federal Reserve that you will read in all reference books. And it will be presented as a great advantage. The Fed is an 'independent financial institution established in order to function as the central bank and perform centralised control over the US commercial bank system'.[23]

So, what is the Federal Reserve System independent from? From the government. This means that the President of the United States has no influence on the policy of the Federal Reserve. Otherwise, what independence are they talking about? If the head of a corporation can appoint or dismiss the head of one of the companies within its corporate group, we can hardly talk of any independence. And if the head of the corporation has no right to dismiss him or make him to pursue a policy needed by the group, what kind of head of corporation is that? This is not authority any more but mere illusion. Similarly, speaking of the independence of the Fed on the one hand and of the control exercised by the state, on the other, is creating an illusion. One cannot be slightly pregnant, it is either one thing of the other.

The essence is simple: in the capitalist world everything is decided by shareholders, that is by owners of companies. If they want, they can appoint a CEO, otherwise, they can give him the sack. No American president could make Coca-Cola or Pepsi shareholders dismiss or appoint the CEO of these companies because neither he, nor the American government owns the control stock of these organisations. The situation with the Fed is similar. How many shares of the Federal Reserve System belong to the American Government? None. How can the President appoint or sack the head of the Fed? He cannot.

It does all look decent though. The Federal Reserve banks establish the governing body of the Fed, called the Board of Governors, and delegate one member each.[24] Each member of the Board of Governors is appointed for a term of 14 years.[25] These Governors then elect the Chairman of the Fed. He is appointed for four years and the US President confirms him at the position.

What do we see? This is an imitation of subordination. This is what you will find in the book written by the Fed Chairman, Alan Greenspan: 'Federal Reserve System, formally independent from the White House'.[26] What is informal dependence then? In a world where the whole management structure is strictly vertical, such dependence simply does not exist. No structure has one. There are always superiors and subordinates, ordered according to the staffing establishment, law or criminal practices.

We are dealing with an imitation. An imitation of formal subordination. Going back to the Coca-cola example, its shareholders can write in the corporate charter that every CEO has to be confirmed by the President of the United States. The head of the White House does not own any shares and therefore cannot vote. But he is granted the honourable right to sign the confirmation of the head of the company. The situation with the Fed is exactly the same because the appointment of the Fed Chairman is the most important appointment in today's world economy and hierarchy. Far more important than that of the US President.

You will also read that the FRB is accountable to the US Congress. But this is an imitation as well. It is as though the head of the Coca-Cola company made a statement in Congress and members of Congress heavily criticised it for the high concentration of sugar in the drink and for using the plastic packaging. What could they do apart from criticising? Nothing – Coca-Cola would continue to produce the same drink, with the same concentration of sugar and in the same packaging. In a similar manner, the FRB is accountable to Congress for its performance. And members of the Congress can criticise the organisation as much as they please, they can stamp their feet in anger and blame them for causing the recession and bad performance but it would have no legal implications.

As a result, we get a very peculiar image.

The main money for trading and main money for saving on the global scale is issued by an organisation owned by an unknown group of private bankers. But why should we care about the USA and the rest of the world – we should be primarily interested in our own country. It is high time we discussed the rouble. Let us look at it. Let us read what it is written on it. This is something that an ordinary person in everyday life never does. We are, frankly speaking, only interested in the value of the bill and not in what it says. Now, let us have a look. A note of the Bank of Russia'. Does it mean that the note was made in Russia? Geographically, yes. And de jure – no. Why? Remember the Federal Reserve System that issues green dollars with portraits of American presidents, an independent Central Bank, independent from the state. Is the Russian system the same?

In order to understand it, let us read the law on the Central Bank of Russia (Bank of Russia).[27] Let us start with the simplest question – who issues roubles? This is easy – the Central Bank of Russia, also known as that Bank of Russia, has the monopoly on issuing the Russian national currency. This is exactly what article 4 of the law says: 'has the exclusive right to issue cash money and organise its circulation'.[28] Does this sound sensible? Yes, there should be only one issue centre. But what is it controlled by? In order to find out, we carry on reading. The most interesting article in the law on the Russia Central Bank is probably article 2. It contains so much information that one needs to read it at least twice. Let us look at it as a whole and then examine the details.

Article 2. The registered capital or any other property of the Bank of Russia is considered federal property. In accordance to the goals and in the order specified by this federal act, the Bank of Russia exercises the authority to possess, use and dispose of the property of the Bank of Russia, including the gold and foreign currency reserves of the Bank of Russia. Withdrawal and encumbrance of the aforementioned property without consent of the Bank of Russia shall not be allowed, unless specified otherwise by a federal act. The state shall not be liable for the obligations of the Bank of Russia, and the Bank of Russia shall not be liable for the obligations of the state, unless they have taken such obligations or unless otherwise specified in federal acts. The Bank of Russia undertakes its expenditures by means of its own profits'.

So, what belongs to the state? The property of the Bank of Russia. That is – the real estate. Furniture of all sorts, chairs and suchlike. Wallpapers. Pens and computer mice. Turntables in microwave ovens. Is that it? No, it is not. There is also the 'registered capital' of the Central Bank in the amount of three billion roubles.[29] Is it much? You can answer this question yourself. First, look at the size of the gold and foreign currency reserve of the Central Bank.[30] These figures are published every day. Today the reserves amount to ca. 465 billion dollars. Now, you tell me whether three billion ROUBLES is a lot compared to 465 billion DOLLARS. This is very little. It is not the registered capital that matters but the assets of the Central Bank, its gold and foreign currency reserves. This is the 'grand prix', so to speak. And it is very peculiar that the gold and foreign currency reserves should be described in the law as 'other property'. Yet the most interesting part is ahead.

The gold and foreign currency reserves of the Bank Russia do not belong to Russia itself.

How else would you explain the following: 'Withdrawal and encumbrance of the aforementioned property without consent of the Bank of Russia shall not be allowed'. If the states owns the property, then it does not need consent from an organisation that uses the property ON BEHALF OF THE STATE. If the states owns a plot of land, it does not need any consent from the current tenant in order to build something on the land or sell it. In the case of the Central Bank we get a very strange picture – Russian citizens, voters, the people, elected high officials and through these officials granted the Central Bank with authorities in the financial sphere. It was entrusted with the country's gold and foreign currency reserves. And now they cannot use these values without consent of the Central Bank. Imagine that you let someone your own flat and then would not be able to use this flat without the tenant's consent.

'The state shall not be liable for the obligations of the Bank of Russia, and the Bank of Russia shall not be liable for the obligations of the state'.

If the state owns the property of the Central Bank and its gold and foreign currency reserves, why shall it not be liable for its obligations with this property? If the money and the gold belong to the state, then the state can pledge it, that is to be liable for its obligations with its assets. And in our situation, the country seems to have the money but it cannot be spent. It cannot be pledged. Nothing can be done without consent of the Central Bank of Russia. And we have come across another example of legal nonsense – the user can prohibit the owner to use their own property. Or does that mean that the gold and foreign currency reserves do not belong to the state?

'The Bank of Russia exercises the authority to possess, use and dispose of the property of the Bank of Russia, including the gold and foreign currency reserves of the Bank of Russia'[31].

Please note: the authority to dispose. What is that supposed to mean? When at a state institution, say, at a fire station or a tax office, a fire fighter or a tax inspector is sent to work and they are provided with appropriate instruments. The fire fighter is given a hose, a helmet and a fire engine, and the tax inspector is provided with a computer, a calculator and some paper. But the authorities of these employees are confined to, speaking of the language of the law on the Central bank, 'use and possession. There can be no disposition here. The fire fighter does not own the fire engine and the fire hose, and the tax inspector does not become the owner of the computer and the calculator. Similarly, a soldier does not become the owner of the tank or the aircraft that he has been entrusted with to protect the country, and a policeman does not become the owner of the gun and the bulletproof vest needed to capture criminals.

The 'right to dispose' is a legal term that indicates the owner of the gold and foreign currency reserves.

Your family has a wallet which contains a lot of money. You earned it over many years through honest labour. But you are not allowed to spend it. Under no circumstances unless you have the consent of an absolutely independent man who, incidentally, lives in your flat. Technically, he works for you. So to speak. But in reality, he is entirely independent from you. He sets the salary himself, he pays it himself.[32] And you are the one who depends on him, and quite a lot because he is the only person who can authorise you to spend the money YOU have earned. And without his consent you cannot do it. And to avoid all temptation, all your salary and your savings now go to the man and not to you. He guards the 'gold and foreign currency reserves' of your family. You find it unfair? Inconvenient? Strange? On the contrary! It is fair! Convenient! Progressive! And what is most important, there is no other way – if you are entrusted with the money, you can spend it. This is how this situation is explained to us. But you would quickly sort it out with the man in your family – you would simply kick him out. Right? But the man is cunning! As soon as you want to kick him out, he starts shrieking so that all the neighbourhood can hear him. And at the entrance to your house three more men are standing, 'just in case'. They are called 'Human Rights Organisations', 'Independent press', 'Civilised countries'. And it is not you who they listen to, but to your unwanted financial assistant. They vigilantly guard order and justice, effectively stopping you from hurting the man and making you politely ask him for approval of your expenditures. Why? Because you signed the Law on the Central Bank of your flat and now you are obliged to abide. Otherwise, all the newspapers of your district, as well as the bulletin of your company will have your portrait with nasty words about you. Your children will be lectured at school about their parent's 'legal nihilism'. And a sign saying WANTED under a picture of you will be attached to the door of your house.

Therefore, the law should be obeyed, and one should meet one's commitments because this is the way the whole civilised world lives. To spend your own money yourself is obsolete. Look around – all the neighbours live like that. They also have an independent man in their flat, and so does everyone in the building. It is hard for everyone. But everyone has something to aspire to. The boss of all these men lives on the top floor. He spends his money the way he wants, and, what is more, he is authorised to control all the men in the building. He drives around in a Mercedes, and everyone else in the building drives old cars. But the reason why he is so prosperous is concealed – they say that his posh car comes from the right electoral system. Because all his family issues are only solved through election…

Lets us imagine that you have had enough of this situation and have decided to stop caring about the three guys at the door who make a scene about right violation and carry on with dragging your man to the exit. You have decided to stop listening to the tales that spending your own money yourself is obsolete and inefficient. You were not convinced that the independent man is the key to your prosperity and wealth. In a word, you have decided to kick the annoying man out of the flat once and for all. And what do you see? Next to the lift there are three more people. Huge muscular blokes with very grim faces. The armbands on their sleeves say 'The US army', 'The British army' and 'NATO'. Still determined to kick the man out? Get ready for a fight then…

The law on the Central Bank is full of controversies. It is technically federal property, and nevertheless, the Central Bank has no obligations towards the state. What is more, should we, that is the state, decide to get rid of the annoying man and use the gold and foreign currency reserves of the Central Bank to build new factories and roads, we would be doomed to failure. The three guys next to the lift would not beat us up while we still have the Russian army and the nuclear shield. But very soon a fourth roughneck would come to the flat. 'Independent International Court' is written on his back. You must have already guessed that there is no chance for justice. The Central Bank of Russia, if the Russian state wants to use what allegedly belongs to it… can file a complaint to the international court!

Article 6. The Bank of Russia is authorised to file suits to courts in accordance with the legislation of the Russian Federation. The Bank of Russia is entitled to appeal to international courts, courts of foreign countries and courts of arbitration for protection of its rights'.

The Bank of Russia and the state cannot decide a controversy themselves. It will be decided by the Stockholm court of arbitration. Or the independent court of the State of New York. This is as ridiculous as if the Central Party Committee and the People's Commissioners for Finances at the times of Stalin did not solve their disputes in the Kremlin or government sessions, but at the court of the Third Reich. It was equally independent from the Central Committee of the All-Union Communist Party and from the USSR government. Right? Right. Therefore it could decide who was right and who was wrong in the USSR, being the court of Nazi Germany. It would have been fair and impartial. And of course, it would have been guided only by the interests of Russia and by the letter of the law. But the funniest thing is that should the Central Bank appeal to the International Court of Justice, it would inevitably win. And Russia, that is us, would inevitably lose. Why? Because the Central Bank is a part of a whole system of similar central banks which, in their turn are a part of a web called the International Monetary Fund (IMF). And what is most important: the gold and foreign currency reserves of the Central Bank of Russia are not stored in Russia. Except for a small percentage of gold stored in Russia, the rest of the reserves of our Central Bank does not look like wads of cash from various countries bound with rubber bands but digital 'zeros'. Which are stored, incidentally, in computers abroad. Gold and foreign currency reserves of our Central Bank are invested in state bonds of other countries, mostly in US state bonds: 'Russia has spent over 30% of the gold and foreign currency reserves on buying securities issued by the US Treasury… According to the American Ministry of Finance, our country's investments in American state bonds have grown by 3.5 times over the last year – from 32.6 billion up to 116.4 billion dollars. And now Russia takes the 7^th place in the rating of countries crediting the United States.'[33]

Can you imagine the USSR State Bank investing 30% of its reserves in US state bonds? Not in gold, but in bonds?

But let us be just – the Central Bank does not invest the gold and foreign currency reserves only in American securities. The International Monetary Fund also receives some funds: 'In the near future Russia will invest 10 billion dollars of the gold and foreign currency reserves in bonds of the International Monetary Fund (IMF). This was announced at a meeting with Russian president Dmitry Medvedev by the Finance minister of the Russian Federation Alexey Kudrin. According to the minister, it was the Central Bank that was going to invest the money'.[34]

The fact that the IMF is fully controlled by the Anglo-Saxons and other monstrous offspring of Bretton Woods will be discussed later. For now we will only note that the Central Bank always purchases various bonds when Russian economy needs the credits resources. But investing them inside Russia is impossible. Why? It is prohibited by law.

Article 22. The Bank of Russia is not entitled to credit the Government of the Russian Federation to fund budget shortfall, buy state securities at the initial offer, except for the cases when it is provided for by the federal law on federal budget'.

The Central banks of the so-called developed countries credit the budget through buying state bonds. And our Central Bank is not allowed to buy Russian bonds. But it can buy American state bonds and securities of some other countries. This is an important detail: the Central Bank of Russia is only entitled to buy bonds issued by OTHER countries, which means that it is obliged to credit other countries' economies. Very particular economies actually.

According to the legislation, the rouble can only be issued by the Bank of Russia. And according to the same law, it is not entitled to provide loans to the state. How is emission organised then, how are roubles introduced into circulation? Easily – through purchasing foreign currency at the stock exchange.

The system works as follows:

? Russia sells certain goods at the global market;

? the country receives 100 dollars;

? the Central Bank buys the dollars at the stock exchange;

? the dollars go to the gold and foreign currency reserves of the Central Bank;

? Russian economy gets 3000 roubles.

In other words, foreign currency can only get into the country through the stock exchange, where it is sold and the respective amount of roubles is 'injected' into Russian economy. Some sort of an unspoken parity rate for the population is observed. The parity rate between the amount of dollars in the gold and foreign currency reserves and the amount of roubles in the economy. For example, oil prices grow. For the same goods Russia now receives 110 dollars and not 100. The parity is tilted and the Central Bank corrects it. It lowers the dollar exchange rate, buys them for less money and injects in the economy a smaller amount of roubles per dollar. If the oil price drops, the process is reverse: the Central Bank increases the dollar exchange rate. And now, for each incoming dollar, more Russian currency is issued. It is the Central Bank that watches the gross volume of roubles. As according to the law on the Central Bank it is the governing body of the Central bank – the Board of Directors – that makes decisions regarding 'total volume of cash issue'.[35]

In other words, there is a strict relation between the monetary stock inside Russia and the dollar stock that Russia receives from the outside. And that means that we are vulnerable. We are not fully independent. Why does the Central bank keep the parity rate between the amount of dollars in the gold and foreign currency reserves and the gross volume of issued roubles? Because the Central bank controls issue of the rouble in the 'currency board' mode.[36]

It is required because any country which is a member of the IMF is obliged to guarantee single-step exchange of the total amount of the national currency into dollars and pounds using its own gold and foreign currency reserves. This rule has to be observed at any given moment. Otherwise, a country cannot be accepted to the IMF. And without being in the IMF one cannot be a part of the 'civilised society'.

As a result, the Russian economy does not have as much money as required for its proper operation but equal to the amount of dollars in the reserves of the Central Bank. The amount of roubles that can be issued depends of the amount of dollars Russia received for its oil and gas. That means that the whole Russian economy is artificially put in direct correlation with the export of natural resources. This is why a drop for oil prices causes a collapse of everything and everywhere. This is not due to insufficient tax collection from oil sales. The reason is that roubles disappear from the economy, which is followed by a collapse of trade, construction, reduction in salaries and curtailment of the whole production process.

It is important to understand that the gold and foreign currency reserves of the country are not state reserves. This money is not to be spent. It has to stay in the storage of the Central Bank just to make it possible to issue roubles. The gold and foreign currency reserves do not do any good to the government or the people. Their role is completely different – this is guarantee, which cannot be spent and which allows to issue roubles. Why they cannot be spent is clear – if we sell dollars to cover the country's external debt, the roubles issued under the guarantee will remain in the country. The balance will be distorted. And this is against the rules. This is not acceptable.

Here is an example: Putin paid Russia's external debt. Well done him, he cut one of the financial ropes that the global puppeteers used to control us. Only one so far – the other one is still in use. And he did everything 'in accordance with the rules'. The external debt was paid from the stabilisation fund which actually belongs to the state.[37] No money from the gold and foreign currency reserves of the Central Bank was paid to cover that debt. Why? Because it is not allowed! Why is not allowed? Because in 1944 in a town called Bretton Woods international agreements feigning further development of mankind were signed. We will talk about the Bretton Woods agreements and everything that has happened in the financial mirror-world since when in another chapter.

And now let us continue being amazed while reading the law on the Central Bank. It contains a lot of much more important information. Again, we are going to deal with the main question: who is in charge of the Central Bank of Russia? Who controls it? It seems that no one. At least, no one in Russia. Article 1 on the law is unambiguous enough:

'The functions and authorities specified in the Constitution of the Russian Federation and this Federal law, are exercised by the Bank of Russia independently from any other federal bodies of state authority, bodies of state authority in subjects of the Russian Federation or local government bodies'. We can try our last chance to find any governmental nature of our Central Bank by looking at the order of forming the governing bodies. Chapter III is called 'Governing bodies of the Bank of Russia'.

Article 12. The Chairman of the Bank of Russia is appointed by the State Duma for a term of four years by a majority of votes of the total number of members of parliament. The candidate for the post of the Chairman of the Bank of Russia is presented by the President of the Russian Federation. The State Duma is entitled to dismiss the Chairman of the Bank of Russia upon the recommendation of the President of the Russian Federation'.

Is that clear? The Russian President introduces and the State Duma appoints. The Duma as well dismisses the Chairman from the post. But this is just the beginning. The law is written in such a cunning manner that the possibility to dismiss the Chairman of the Bank of Russia from their position for the President and the State Duma is purely theoretical. In order to make sure in this, let us just read article 12 to the end.

'The Chairman of the Bank of Russia can only be dismissed from the position in the following cases: 1) expiry of term in office; 2) disability which makes performance of duty impossible and which is confirmed by a state in the US government stocks and other abstract entities. You can see that for medical commission; 3) there is a personal resignation letter; 4) the person in question committed a penal offence and was found guilty and sentenced; 5) if federal acts regulating issues related to the activities of the Bank of Russia have been violated'.

So, apparently, if the Chairman of the Central Bank: 1) is fit as a fiddle, 2) the term in office has not expired 3) is not willing to leave the job, 4) does not pinch wallets off old ladies, 5) observes the federal legislation (that is, does not credit his own country) – dismissing the man is impossible.

He can even pinch wallets off old ladies but until there is a sentence from court, the State Duma cannot dismiss him. The Russian president cannot do anything either. It is interesting, is it not? Cannot the head of an organisation appointing a financial director dismiss him with a decree and appoint a new one? Or does he have to wait for four years? Or a sentence from court? Or summon a medical commission? No, in reality, the head of an organisation is free both to appoint and dismiss his subordinates. The head of state in Russia is the President. All other governmental officials are his subordinates whom he controls, not directly, but through ministers, governors, mayors, generals and admirals. And only the Chairman of the Central Bank is beyond time and space. The President cannot dismiss him or give him the sack. And if he does, the banker can appeal an international court. And the position of the head of the Central Bank is indeed a key position!

Article 23. The federal budget funds and state non-budget funds are stored in the Bank of Russia unless otherwise specified by federal laws'.

So, apart from the gold and foreign currency reserves… it also stores the whole Russian budget. Accounts of the Central Bank hold what used to be the unified Stabilisation fund. 'The Reserve fund and the National Welfare Fund are stored on accounts of the Central Bank of the Russian Federation to account these funds in foreign currency in Moscow'.[38] You would not be wrong if you said that the Central Bank is our everything, meaning that all funds of our country are concentrated there. And this key department is not controlled by the state?! Do you understand what that means?

If you look closer at it, you will see traces of the compromise achieved by the Russian authorities and almighty bankers in the scheme of control over Russian finances. I would like to remind you that the Stabilisation fund that we have just spoken about was divided in two parts: they were called Reserve Fund and National Welfare Fund. So, the funds in the first one are controlled by the Central Bank, that is not the state, and the funds in the second one – the Ministry of Finance, that is the Government, that is the state…[39]

Article 5. The Bank of Russia is accountable to the State Duma of the Federal Assembly of the Russian Federation. The accountability of the Bank of Russia to the State Duma means that the Chairman of the Bank of Russia is appointed and dismissed from the post by the State Duma on the recommendation from the President of the Russian Federation'.

And this is all the accountability there is? But we have just found out that it is only an illusion because the head of the Central Bank cannot be dismissed without his consent and will. Incidentally, it is practically impossible to dismiss other bankers from the Central Bank.

Article 13. The members of the Board of Directors are appointed for a term of four years by the State Duma on the recommendation of the Chairman of the Bank of Russia, agreed upon with the President of the Russian Federation. The members of the Board of Directors can be dismissed: at the end of their term specified in this article – by the Chairman of the Bank of Russia; before the end of the term specified in this article – by the State Duma on the recommendation of the Chairman of the Bank of Russia'.

So it is only the Chairman of the Central Bank who can give the sack to stubborn colleague – as to dismiss a banker who is also a member of the Board of Directors of the Central Bank a recommendation of the Chairman is needed. The State Duma itself cannot dismiss bankers unless the Chairman of the Central Bank wants it. How can they say that the Central Bank is accountable to the Parliament then?

What was it like before? In the USSR the financial system was based on the principles of common sense. The Council of ministers of the USSR, that is the Government, was in charge of the financial sphere. The State bank authorised to perform emission operations was the body that followed all instructions from the USSR Government regarding the monetary system. This was an antipode of today's Central Bank. It followed the orders of the Government, no consent from the State Bank was needed, and its head was appointed by the Council of Ministers and was dismissed in the same manner. The State Bank had no right to appeal to a foreign court. The amount of money required for the country's economy was defined by the Council of ministers and the State Bank only issued it.

The money issued in the USSR was of three types: notes of the State Bank of the USSR, treasury notes and metal coins. The differences between the bank and the treasury notes were purely juridical. Only bank notes were backed with gold, precious metals and other assets of the State Bank, which as stated on the bills from ten roubles. One-rouble, three-rouble and five-rouble notes (treasury notes) had a different inscription on them and were backed with the whole 'property of the state', so they did not have any gold content. In everyday life ordinary citizens had no idea about these details and that there was a difference between the two types of Soviet money. All types of money were issued into circulation by the State Bank of the USSR.

Did Yeltsin understand what he was doing in 1990? I am sure, he did not. Illiteracy of the USSR population in financial issues was amazing. But it was not too bad back then – the Soviet people did not have to deal with anything more complicated than public bonds and deposits in a savings bank. The problem was that the elite were just as illiterate. And that ended with a catastrophe. An idea of a bank independent from the state was brought into the Soviet Union as a Trojan horse – through 'advisors'. through those who had practical trainings at Columbia University, those who were recruited or simply betrayed their country. Just as in the Hollywood film Alien' – an extra-terrestrial creature was implanted into a living body. I am exaggerating – a private Central bank was indeed like an alien for the USSR.

Now, are the following events surprising at all? I do not think so. If anything, they are logical. I would just like to address Gorbachev with one question: Mikhail Sergeevich, how did you let this happen being the president of the USSR? What were these banks, independent from the people's authorities, which appeared in our still multinational state still governed by the people? He will not reply though. Or he will start his old song about humanity, the new way of thinking and a chance to get everyone disarmed. I put all my hopes on hell and cauldrons with boiling oil…

Do the Russian authorities know about this 'strange' situation with the Central Bank?

What should one do if there is understanding of the importance of the task and yet there is no power to solve the problem? One should start a systematic siege. The task should be broken into several smaller ones. To change the legislation regarding the Central Bank, a vote in the State Duma is needed. The founders of the Bank of Russia saw perfectly well what a key role it would play. And therefore they did their best to create several security levels. The first level is the law on the Central Bank. Among other things, it contains such amusing details as article 7: 'Drafts of federal law and regulatory documents of the federal bodies of executive power concerning duties of the Bank of Russia and it performance shall be submitted to the Bank of Russia for approval'.[40]If you want to dismiss bankers through making amendments to the legislation – kindly submit the draft of the bill to them in advance. Otherwise, they might as well sue you for your legal mayhem in a court of Delaware…

The second security level is the Constitution. As the 'reformers' shoved some words on the Central Bank and its status even into the Constitution. Article 75 (points 1 and 2) says that 'the currency of the Russian Federation is the rouble', and 'issuing of money shall only be done by the Central Bank of the Russian Federation', that 'it performs independently from any other governing bodies'.[41] If you want to be surprised – have a look at Soviet Constitutions. Read the Constitution of the USA. You will find no mention of a bank that issues money independently anywhere, because such articles should not be a part of the main law of the country. What body issues the currency is a technical question, it is not fundamental for the country and its people. For the people it is not very significant, but it is a key issue for enslaving the country. That is why it was hastily dragged into the Constitution. And now this technical detail is there next to the fundamental rights of Russian citizens.

All the following steps of the Russian authorities will make more sense if we use the failed mounted attack against the Central Bank as a reference point.

Laws need to be changed. That means that it is necessary to take the State Duma under control. That means that a parliamentary majority is required. And therefore, a party needs to be created that will win the general elections. A political structure which is currently rather popular starts being created.

Winning the elections is not possible without controlling the mass media. The process of talking the mass media under control begins.

But what is even more important is talking Gazprom under control. In spring 2001 a new team comes to the company headed by Alexey Miller. Gazprom is not just gas flares and pipelines. It is also money required to buy the loyalty of the elite.

The cold truth among politicians in Russia at the time was that if you do not pay for loyalty, you are going to be betrayed as very few people can work for the sake of the idea, putting material welfare at the very end of their priorities. It takes a while to find such people. Where? Among one's friends. This is when people from St. Petersburg start coming into Russian politics and economy. It is required to put one's own people at key positions and secure their loyalty with a high salary provided by Gazprom, with some encouragement' in an envelope or turning to blind eye to their 'mischievousness'. One can only have very few close friends whom they know very well. When one runs out of them, one has to switch to friends' friends. These will not betray in conditions when betrayal is normal, as long as they have a secure reasonable income.

One of the most important parts of the preparation are the law enforcement structures. Otherwise, one may just not live long enough to see the victory. It is required to fill the key positions. First of all, the doctor, the head of security and the cook. Then the minister of defence, the Home Minister, the head of the FSB, the head of the Federal Security Guard Service. If you look at the dynamics of changes of leading officials in these spheres – a lot of things will become clearer.

If you are still not entirely convinced that the key to all the problems is hidden in the corridors of the Central Bank of Russia, then there is an interesting table at the website of the Central Bank – just for you.[42] It is called 'The Base Rate of the Central Bank of the Russian Federation'. In crude terms, this is the interest rate at which the Central Bank credits banks and through them the whole Russian economy. As, let me remind you, no one is authorised to do it except for the Central Bank because roubles are issued by the Central Bank which then lends them to commercial banks.

Looking at the table you will easily see that from 1st June 2010 the base rate has been 7.75%. This is written at the very top. And now scroll down. Have you still got any questions why the Russian economy was dying in the early 90s? Simply because the only issuing authority lent money at a 210% annual interest rate.[43] We have forgotten about that but this is how it was. This is a record-breaking rate of course, but generally in the period between 1993 and 1996, for nearly three years, the interest rate was a three-figure number. Try and borrow some money at a 210% rate! It does put you off from starting your own business and talking a loan, does it not?

This is not a number, this is something out of this world! And, what is most interesting, do not confuse the consequence with the reason. It is the Central Bank that is to regulate the circulation of money in the country so that the country could breathe normally and develop. And it is on its activities that the level of inflation depends.

That is to say that the inflation rate was extraordinary, and the prices were skyrocketing exactly because the Central Bank credited the Russian economy at such an extortionate rate. And not vice versa! If the idea of borrowing money at a 210% rate does not appeal to you, may be you would like 55% more? Still no? Yet this was the base rate when Putin became the head of the country in 2000. And since then the percentage has been gradually reducing until it reached 7.5% of today. The economy could finally breathe. The Central Bank had been purposefully smothering it, absolutely consciously. It can be proved by the negative processes that took place in the absolutely market and very capitalist American economy when the Federal Reserve System of the USA held the base rate not even at a rate of 210% or 55% but at a mere 20% rate.

'In April 1980 the main interest rates in the USA exceeded 20%. Cars stopped being sold, houses remained unfinished, millions of people lost their jobs – by the middle of 1980 the level of unemployment reached 9% and kept rising until the end of 1982, nearly reaching 11%'.[44] It is no one but the former Fed Chairman Alan Greenspan himself who tells us about this. And if you do have a look at the aforementioned table, you will make sure that the Russian economy lived at such a deadly rate of 21% from 7 August 2002 until 16 February 2003, and about ten years more at astronomical rates of up to 210%. What would have happened to the US efficient' economy if the FRB had raised the base rate up to 45% and kept it at this level for five years?

In order to see what destructive consequences bankers from the Central Bank and their superiors from abroad were leading our economy to, just look at the following table. There is much less money in the Russian economy than in economies of Western countries. Some might say that Russia does not work enough. Rubbish! This is like trying to explain anaemia with the fact that the patient does not work enough, forgetting that the doctors just do not trouble themselves with feeding the patient properly. The Central Bank consciously performed a demonetisation of the Russian economy. Just as a normal human body requires a certain number of litres of blood to function properly, an economy needs a certain stock of money. The amount of money in the Russian economy was drastically reduced, which immediately led to a lack of longer-term money required for economical growth and caused a stagnation of the economical development. And the volume of 'blood' let out of the economy amounts to 1.3-2 trillion dollars.[45] For such a policy the Central Bank can be considered the Central Bank of anything but Russia.

Demonetisation of the Russian economy was performed from early 1990s during active implementation of developments prepared by American experts into the Russian macro-economical and political policies. Monetisation still has not been restored[46]

So, what made the Central Bank gradually lower the high base rate? Or maybe, WHO made them reduce the interest rate grip at the throat of the Russian economy? All it takes is to look at the steady lowering of the base rate since Vladimir Putin's team came into power in Russia…

And if are still not convinced that the vast gold and foreign currency reserves of the Central Banks do not belong to Russia, just ask yourself one question: why is the Government going to privatise and sell shares of various companies owned by the state? Why sell shares of'Rosneft' and VTB when you have 450 billion dollars in the reserves? In order to get some money. Why sell liquid assets to get some money if you have plenty of money?

There can only be one answer – if these billions do not belong to you. And projects require money, development requires funds. Even fighting terrorists requires money as well as secret services. Money is required for everything and all the time. But when was the first time the 'printing machine' become non-governmental? When did this madness begin?

It all dates back to history.

2

On the Bank of England and the Sun King's frail relatives

There are historical facts that are known practically to everyone. There are historical figures familiar to every pupil. Yet it is enough to probe just a bit deeper about one of these well-known events or personalities and it turns out that we are completely ignorant of that. Here is an incontrovertible fact – the French monarchs inherited crown from one another. For a very long time all of them were called Louis. The name remained the same – only the ordinal number of the king changed. The most famous Louis (and the most famous French king generally) was Louis XIV. It was he who bore the title of the Sun King and who built the famous series of palaces and gardens, Versailles. It was him, who Dumas described in his novels as having put an iron mask on his twin brother. It was him, who as a boy d'Artagnan and the three musketeers defended from the intrigues of the cardinal. And some years earlier these four protected his mother – Anne of Austria – from another cardinal – Richelieu.

He was the most 'branded' French monarch, to use the modern show-business parlance. He is featured in literature and cinema, his mistresses are talked about in TV programmes. Yet the real life of the Sun King was so exciting and unbelievable, that Dumas's stories are by comparison just a collection of dull, bleak stories, and it is about this most exciting part of the monarch's life that historians and novelists are tight as a clam.

Museum guides on the other hand say a lot about the Sun King to their tourists, to everyone who visits the beautiful Versailles and wonderful Paris. So, what do they say?

The King lived in the lap of luxury and pursued invasive wars. Well, that does not say anything special about him, for in those times everyone fought wars and everyone tried to surround themselves with at least some luxury. Those who are better educated will make an obligatory remark, that Louis the XIV ruled for a very long time – for over 70 years. Even the reign of 'comrade Stalin in comparison with Louis was nothing but a one-reeler. So, generations changed, children became parents, grandchildren were born, and the King remained on the throne, as an eternal and irremovable symbol of power. Here we should recall his famous maxim: L'Etat, c'est moi' ('I am the state').

And now I am going to ask you a question, dear reader. What is the relation of Louis XIV to his immediate successor on the throne – Louis XV? I have presented this question to many people. So far, nobody has given me the correct answer. It would seem that no question could be easier. We all know this king, we know Versailles, and we have a general idea of the French history. The most common answer is that he was his son. Those who realise that there must be a catch in the question try to grope for the right track and reply 'grandson'. Wrong. Then one normally replies: 'Nephew'. Still wrong. Then, finally, they make a desperate guess – 'he is not related to Louis XIV'. And that is wrong, too.

The throne of Louis XIV, the politician, who established the most powerful state, the statesmen, who was in control of the country for seventy two years, was inherited by his great-grandson. And mind you, the Sun King was not childless, and neither were his children. Yet it was only one of his great grandsons who inherited the throne. What happened to all the in-between heirs? Why did nobody reflect about the reasons of such strange events?

I am very often surprised by the fact, that historians for some reason persistently refuse to understand the real springs of action that shape the discipline they study. They will not compare the dates of various events, to coordinate them, as criminologists do as they try to solve a case. I speak of motives, coincidences, indirect evidences. These are the three pillars that all criminal investigations are based on. And we are going to conduct such an investigation right now. Let us study the history of that period and try to comprehend what happened to the family of the 'Sun King'. It is important, because the decline of his family coincided with the first, even if tentative blossom of the 'money printing device', which is now dominating nearly all over the world. And at those times this invention was just talking its first steps towards establishing worldwide hegemony. The monster had just hatched. And the family of Louis XIV was one of its first victims…

Money is power. Whatever your attitude towards money may be, you cannot deny the fact. And who could be more aware of the fact than those by nature of their occupation submerged in the world of jewellery and gold? In different times bankers existed under different names: in the ancient world they were called money changers, then jewellers and merchants. Let us call them bankers. Just like any other human beings bankers had a dream. They dreamed of obtaining a boundless source of power and wealth. Similar dreams captivated the alchemists and warlocks who desired to discover the secret of turning cheap metals into gold. In the end, they failed: the science of alchemy was abandoned as it brought no results giving way to modern chemistry. The warlocks were burnt at the stake while bankers happened to be luckier. They managed to get a true recipe of making gold out of nothing. As one cannot get around the laws of nature, the task was not to create gold itself but to endow some other things with the qualities of gold. Not only to use gold and silver as currency, but to elevate money to some extra value which is not the same as that of some metal. And – as a result – to substitute gold with paper money, that would be conceived by bankers themselves.

The idea was in the air. In the middle ages bankers stored gold of some, and lent this gold to others. Besides, they overtook – for a small reimbursement – another bank function: the payoff one. Gold does not necessarily need to be carried from one place to another. All one needs is just a bank-bill, i.e. the document reading that the presenter has the guarantee to get a certain amount of gold from the banker who issued the bank-bill. A piece of paper is more comfortable to travel around with than a sack of gold, is it not? All the more so as the world was rather volatile in those days. Having presented this document, one could get gold from the banker in the other town without risking precious metals. All you have to do is the following: you give your gold to the banker against a warrant, then you present this warrant to the banker in the other town as a paying means for the goods you need. It is practical and secure.

And what the banker gained was a unique possibility to issue more 'gold warrants, than he could back by real gold in his storages.

Who could check how much he had altogether? Who could know how many depositors stored their gold with the banker, and how much gold he owned himself? Who could check how many borrowers had borrowed gold? How much was left? Miraculous opportunities revealed. Only one situation was to be avoided, and it is also catastrophic for any bank today. It is the situation when all the depositors at once come to take their money back. The bankruptcy is in this case inevitable because it would be clear at once that the banker had issued more warrants than he had real gold. That he simply cheated.

The more paper warrants that were given by the banker to his clients, the higher was the risk, the risk of being disclosed. Apart from this danger there was another one – the idea seemed to be far too simple and elegant. Someone else could be exactly as clever. And this mastermind could have begun 'cheating' himself, or, if his authority were sanctified, he could have beheaded the sly bankers and put up their shutters once and forever.

This genial gamble required some solid protection which was invented by an unknown banker. A force was needed that would defend and would stand up for bankers. As a matter of fact bankers, having invented such a simple method to create money out of nothing, entrenched upon the millennial foundations of economics, where the values had always been real. He tempted the soul of humankind. He began to lend credence. Credence in that some gold is reserved under a warrant, credence in that a banker can always meet a bill with the yellow metal. In reality this credence proved to be enough, it turned out that it is not necessary to have that much gold – it is enough to have faith that this gold is really there. Today's economics are based on this very principle. Have you not heard in major TV and radio news, the expressions 'investors trusted in the USA's economics' or 'traders trust in the fast recovery of the Eurozone'? What is that? That is faith, nothing more. With a helping hand of bankers modern economics has stopped being a science and turned into a religion. And in the Middle Ages it was dangerous to trifle with faith…

So, the 'inventors' of getting money out of nothing needed some armed shelter. The gains involved were enormous, the opportunities for the bankers were far too tempting. Without the support of the state 'money changers' would never stay afloat. And they shared their idea. With whom? To clarify this question it is enough to check, where and when the idea of bankers was implemented on the state level.

The first organization to 'make money out of nothing' was the Bank of England. Let us do justice to the Englishmen – it was on their territory where the first private currency issuing centre was created. It happened nearly 300 years before the US Federal reserve system was established. So, the bankers shared their idea with the Royal Family of England. Yet after the juxtaposition of facts and dates one gets an impression that the Albion became the cradle of private money issuing… not quite voluntarily.

'The Bank of England was founded in 1694 to act as the Government's banker and debt-manager.' This is written on the official website of the Bank of England. According to the official version, this is how it happened. Due to the numerous wars, the Royal Treasury was empty by 1690. In 1693 a Chamber of Commons Committee was established in order to find ways of obtaining extra money. At the same time, a certain financial expert from Scotland called William Paterson appeared out of nowhere and offered a solution for the financial deficiency problem[47]. For this favour he did not ask for a soul as Mephistopheles would, but called for the establishment of the Bank of England, creating the first private issuing centre in the world which would not issue bank warrants but actual state money.

As you can see, bankers used mimicry and disguise from the very beginning. Even the first agency to make money out of nothing already bore a proud name which clearly referred to the governmental nature of the institution. But the Bank of England was private, and its shareholders were bankers and the King.[48] The budget deficiency was eliminated by issuing paper and not golden pounds sterling. A public subscription to a loan of 1,200,000 pounds was announced; subscribers formed a privileged company which was given control over negotiations regarding all the subsequent loans. The list of subscribers was filled within ten days'.[49] It is this 'privileged company' that became the mysterious group of people that managed to gradually impose their rules on the rest of the world over the next several centuries. Yet they could have failed. But for a start they guaranteed the new paper bills of the Bank of England and that they could have been exchanged for gold. However, if we look at the dates and the circumstances of establishment of the Bank of England more closely we might have doubts about it all happening smoothly and amicably.

The king who agreed to establishment of the Bank of England was William III, Prince of Orange. The thing is that he ended up on the English throne as a result of a coup d'etat[50] which took place six years before the Bank was founded. While still ruling over the Netherlands, in 1688 William received a secret letter (!) from England with an offer to overthrow James II and take the throne[51]. On the 5^th November 1688 he disembarked on the shores of England together with an army and set off to London[52]. These were hired warriors and they consisted entirely of foreigners with the exception of some English ex-pats. William III became the king almost effortlessly. Dethroned James II fled to France while the new king started negotiations with those who, most likely, sponsored him to hire his army.

The money also served to pay for the sudden loyalty of the leaders of the English army. As a matter of fact, the invading troops were immediately joined by the nobleman who was in command of James's army. One of this man's descendants became one of the most distinguished politicians in the world history – his portrait with a cigar in his mouth is familiar to everyone. This heir and descendant is Sir Winston Churchill[53]. No one is going to say that the title of the Duke of Marlborough, proudly carried by the Churchills today, was conferred to their ancestor for a betrayal. It turns out, however, that John Churchill who was commanding James's troops changed sides and joined William Prince of Orange and, thus, determined the future of the country. It is from the new king that he got his title – the Duke of Marlborough. Can we be quite sure that he did not get anything else as a reward?[54]

The new king started a new period of economic growth in England. Here we should ask ourselves one thing: why was it during this new reign that the British economy started to prosper? The people had been working like mad before but their living standards were not any different from the rest of Europe. In the middle of the 17^th century, for example, England produced 4/5 of all the European coal. Metallurgy developed a lot during the period. So did shipbuilding, potter trade and hardware manufacturing. But production of fabrics turned out to be a real national craft for England. Export of fabrics accounted for 80% of the total export.[55] Britain also went as far as prohibiting export of wool which had been exported before and thus became a country which supplied external markets with finished woollen goods.[56]

These goods, however, did not make the English rich. The country's economy was just another economy at the time. And all of a sudden there came prosperity. Contemporary British historians and politicians like William III a lot. And they tell us that it was during his reign that the Bill of Rights was passed which became the basis of the new political system of the country. This is a typical trick used by demagogues and manipulators – in order to prove a certain statement they simply omit some of the facts. They need to demonstrate that it is the Parliament and the system of elections and nothing else that brought prosperity to the Albion. People of today have a modern image of elections and they cannot picture them in a different way. And when they find out that back in 1690 England already had a democratically elected parliament they immediately realise that Russia was lagging behind by centuries. But actually we have nothing to worry about. Those who are trying to manipulate our opinions choose not to mention that there was no such thing as universal elections of a democratic parliament – only those who had at least 200 pounds in money or real estate had the right to vote.[57] And the country with a population of 20 million people had only 250 thousand who met the requirement. These were the gentlemen who voted, and a lot of those people made their fortunes by trading slaves and owned 'talking cattle', as slaves were called back then, themselves. Women were not to take part in the elections at all.[58]

What other good things are normally mentioned about King William? It was during his reign that the English East India Company was founded which later became an instrument of conquering and looting of colonies. But the English will turn to looting their colonies later, gold and diamonds from dependent lands will flow into the Empire later. But the country's prosperity started before all that. So, what was the economic miracle that took place in Britain?

The story of William's way to the English throne is rather dubious. He was helped by money and the betrayal he bought with it. Who could give him the required amount? Back then kings borrowed money from people whom these days we would call bankers. So, once in power, the King signed the Bill of Rights, a legislative act designed primarily not to grant universal and equal voting rights but to restrict the King's authority. It was not about freedom and democracy for everyone. British bankers and slave owners thought about no one but themselves. This was their protection against the King potentially changing his mind. Since, if we go deeper we can find information on the number of bankers who took part in the project called 'The Bank of England'. 'In 1694 forty merchants found the Bank of England'.[59] The number of partners is minimal and the temptation is great. Throughout the course of English history people were executed frequently and in big numbers. Forty merchants together with their relatives would not be a big problem. A plot is discovered, people are beheaded and their property is confiscated. And if there is no plot, it is just an insignificant detail. Three hundred years later historians would say that those were difficult times. There are conspiracies everywhere. Similarly, the founders of the new Bank were sent by the Catholic party and the French king in order to weaken England during the fight with its rivals.[60] And the king simply had to take severe measures…

However, history is indeed written by the victors. And the 'printing machine' has been striding successfully around the world for three hundred years since it was first used. And it has its own heroes. For example, American president Woodrow Wilson, who signed the decree on establishment of the American Federal Reserve System, is portrayed on the bill with the highest value in the world of 10,000 dollars. Contemporary British historiography likes William III too, for the fact that during his reign bankers achieved agreement with the royal power. He got funds for fighting for the throne and a share in the 'money printing machine' whereas they got a private emission centre in Britain. It was the first printing machine in the history of mankind that enabled its owners to conquer the world using its amazing features. And then, having conquered the world, to write history and make heroes out of those who made creation of such a machine possible. And dead heroes are always easier to deal with then living ones – they can be spoken for, explained for and they will put up with everything and remain silent. Similarly, King William III, apart from this dark story of coming into power, has a dark story of passing away. His death was just so well-timed…

But we will come back to it later. I would like to draw your attention, dear reader, to one particular fact. Great Britain remained the leading sea power for centuries until the baton was taken by another Anglo-Saxon nation – the USA. Incidentally, at the times when the Bank of England was founded Britain's military capabilities were lower than those of its primary rival. 'French marine forces in 1689 and 1690 exceeded those of England and Holland altogether'.[61] That means that Britain was far from being the Ruler of the Seas – back at the end of the 17^th century this title rightly belonged to France. French Corsairs based in Dunkerque ruined English trade completely.[62] Their English counterparts did not manage to achieve such results. In 1690 during the Battle of Beachy Head, the French defeated the English fleet having sunk twelve of their ships. Twenty ships more were exploded by the English crews themselves. Who remembers this defeat today? Instead, everyone remembers the greatest victory achieved by Admiral Nelson near Cape Trafalgar. How many ships did the heroic Brits sink in that epic batde? Just one![63] And seventeen more ships – led by French Admiral Villeneuve – surrendered. History is written by the victors…

And yet the English did take the lead in the size and capacity of the fleet. And it happened exactly at the beginning of the 18^th century. So, what was it that helped them? Let us remember what was required back then in order to build a great number of latest ships. Just as today, money was everything. A fleet is obviously an expensive thing to maintain. The cost of its construction exceeds the cost of developing land forces by many times. The exhausted English economy 'all of a sudden' found the enormous amounts of money required to build a fleet. Where from? It is the money derived from issuing paper money and using the secret bankers' know-how that was engaged to obtain military supremacy for the country where the printing machine took roots.

It is in that period that the main principles of the British policy were established – not to let another strong power appear in Europe and try to use others to fight. A lot has been written about it. But you will not find the main principle of the British policy in any reference books – not to let there be another strong emission centre. Always follow the same standing rule – your currency should be stronger, more reliable, more convenient, more in-demand than any other currency in the world. As early as the end of the XVII century the founders of the Bank of England understood something that everyone realised to be right only today. It is not a strong economy that makes a currency the strongest on the planet. On the contrary, it is a strong currency that makes the country's economy strongest. Make your money the most important money in the world and everything else will come to you itself. The conclusion is rather obvious – weakening rival countries is required to weaken rival currencies.

This is how the cooperation between clever and cunning financial experts and the British government started. Only after William III, Prince of Orange established the Bank of England, Great Britain as we know it appeared out of the mists onto the political stage. The country is called Great Britain, and was called such even before its greatness had been supported by an English know-how; destabilising the situation within rival countries. This is how Spain was defeated, and marine guerrillas from Holland – Geuzen – were based in English harbours. Later on, French Huguenots received weapons and money from England, which was well described in novels by Alexandre Dumas. And now another invention made by a cunning banker's mind added to this political ingenuity – printing money out of nothing. Financial wit and bankers' cunningness fit the English political tradition perfectly. All together they made a really explosive combination of that Anglo-Saxon political art that Great Britain used against its enemies, as well as against its friends, as a matter of fact. Since then the Anglo-Saxons have been following one rule in politics, and this rule is that there are no rules.

And here we should remember who the main enemy was for the English on the brink of the 18^th century. The answer is obvious – it was France. We will not get too deep in describing the endless wars between the French and the English on various continents and for various reasons. As an example, let us take only one of them – the War of the Spanish Succession. It was during this conflict that England managed to overcome France's power and took the leadership in the size and capacity of its fleet: 'This supremacy setdes and becomes obvious after the War of the Spanish Succession. Before this war England was one of the sea powers; after this war it became a sea power which knew no rivals'.[64]

Year 1702. The War of the Spanish Succession is on. This was the largest military conflict in Europe since the Crusades. The Sun King decided to put his grandson on the Spanish throne, which could have led to creation of a European super-empire – by means of merging two nations in one kingdom.[65] And a union of France and Spain was more than just dangerous for England. It would have meant an alliance of an old enemy which the British had been depriving of colonies and gold, that is Spain, and a new rival on the world arena, that is France. The first aim of such a new most powerful state would have inevitably been destroying Great Britain as a colonial power. The 'money printing machine' found itself in danger soon after it saw the light of day. In order to save the new-born it was required to use the whole range of tools available for money. And England immediately declared a war against France. As we remember, a lack of money in the treasury was one of the reasons why the Bank of England was founded in 1694. And as early as 1702 the English did not have the same problem anymore. Apart from incurring its own expenses, England also paid for military expenditures of Germany, Denmark and Austria. Admiral A. T. Mahan, a famous geostrategist and historian, wonders why France was depauperated and exhausted while England was jubilant and prospering. Why was it that England dictated the conditions of the treaty and France simply accepted them? The historian sees the reason in the difference between wealth and credit. France was fighting alone against several enemies risen and supported by English subsidies.[66]

But where did the English find such money and such opportunities to enlist practically all of Europe to start a war against Louis? The money just appeared. Itself. Out of nowhere. Out of nothing. The same writer says that despite being burdened with a debt which was far too considerable to pay back within a short period of time after a most excruciating war in 1697, already in 1706 instead of seeing the French fleet next to the British shores, they were already sending the strongest ships on annual offensive missions against the enemy.[67] Is this owing to economic miracles? No, miracles simply do not happen. The money for bankrupt England was provided by the Bank of England. France, on the other hand, did not have the money to buy the loyalty of other countries. That is why Savoy, who fought with the French at the beginning of the war, finished it on the side of London.[68] It was simply overbought. The English 'suddenly' had a lot of money. Not only did they manage to pay others to fight for them. They were even able to find enough money to fund the media. No, non-governmental organisations (NGOs) had not yet been invented, there were no 'human rights organisations' or 'independent journalists'. They had to use what they had at hand. And at the beginning of the 18^th century the only 'opposition' that existed in France included the Huguenots. They were opponents to the French government on account of their religion, so would nowadays be seen as real 'prisoners of conscience'. And it was exactly in 1702, when the War of the Spanish Succession broke out, that the Huguenots started a revolt in the French province of Languedoc. It will be known in history as the Revolt by the Camisards.[69]

France did not lag behind. A year after being dethroned by William, King James landed in Ireland, where the situation was quite the opposite: the English, who were Anglican, were oppressing the Irish, who were Catholics.[70] Louis, the Sun King, sent 7000 soldiers to Ireland in order to help him. But military luck favoured London and not Paris. The fight between France and England did not stop for a single day. When the USA started the War of Independence, a squadron of 'volunteers' led by Marquis de La Fayette immediately set off for America. These were military advisers and not awe struck youths or admirers of liberty. The French actively helped the rebellious Northern colonies to fight against their own archenemy. For example, Beaumarchais, the famous playwright who created Figaro, was at the time in charge of a front company called 'Rodrigo Gortalez' which was used to send weapons and ammunition to the New World.[71] At the first opportunity, in 1778, France recognised the sovereignty of the United States and signed The Treaty of Alliance with Washington. And only the retaliation blow of the English which caused a revolution in France itself put an end to this century-long dispute…

It is now time we remembered the mysterious events that took place in the family of Louis XIV. They started closer to the end of that very War for Spanish Succession which started seven years after the Bank of England was founded. The 'printing machine' could not make any steps further to the world hegemony without defeating the Sun King. At this point completely different methods had to be used…

Louis XIV was 73 years old. Nothing seemed to spell trouble. The first to die, on 13^th April 1711, was the King's son and the heir to the throne, Louis, Le Grand Dauphin. Smallpox was claimed to be the reason of his death. This story is very similar to that of the Russian Emperor Peter II, who allegedly entered a peasant's hut to have some water while hunting and contracted smallpox from a girl.[72] This atrocious disease was indeed a recurrent guest in Europe. There is only one contradiction – the Dauphin had smallpox when he was little,[73] and he died at the age of fifty. And, as is well-known, one cannot have this disease twice. Yet the heir to the French throne died within several days.

So, was it smallpox indeed? Or arsenic? Arsenic oxide, also known as white arsenic (As203), is perfect for crimes: diluted in water it has no colour or smell. It does have disadvantages – diluting it in water is rather difficult. But one does not need a lot: 60mg is a lethal dose. And, what is most important, the poisoning symptoms are very close to the symptoms of many diseases.[74] It is very hard to recognise an arsenic poisoning – apart from the digestive tract it also affects the nervous system and blood, causes mucous membranes and skin diseases. At the same time, some clever people tried to prolong their lives by licking a piece of arsenic gradually increasing the dose and thus getting insensitive to the 'favourite' poison of those times.

There are hundreds of stories of poisoning. Some of them remained mistaken for natural deaths until recently, and there are very significant and well-known people among the victims. Such is Napoleon Bonaparte. For your reference – one of the French emperor's fans of our times decided to make the reasons of his death clear. As you know, after the Battle of Waterloo Bonaparte surrendered to the English and was sent to the island of Saint Helena where he died of stomach cancer. There were, however, suspicions that he had been poisoned. In order to find out what the truth was, remaining Napoleon's hair was examined. Arsenic settles in tissues and as it accompanies poisonings, the examination would either prove or refute the poisoning theory. The results prove that the great French emperor was indeed poisoned with arsenic. The quantity of poison in Napoleon's hair is 38 times as high as the limit that a human body can withstand.[75] As of today, the fact that Bonaparte was poisoned is 100% certain but apparently books about this man will keep saying that he died of natural reasons for centuries. So, who poisoned him? He was poisoned systematically – Napoleon's death was not sudden. He was given poison repeatedly. I should remind you that Bonaparte was guarded exclusively by the English, and at the time he was the main enemy of the Albion who had managed to shake the world hegemony of Britain together with the world hegemony of the Bank of England.

And before Napoleon it was Louis XIV who was by far the most wanted villain for the Anglo-Saxons. And bacterial misfortunes started happening in his family with a surprising frequency. After the Sun King's son died of smallpox, it was his grandson, the Duke of Burgundy who became the heir to the throne. But he did not keep the title for too long. In early February, 1712 his young wife died in strange circumstances. She was in fever for several days. The princess could not sleep and doctors did not leave her for a moment. What was happening to poor Marie-Adelaide was unknown. Nothing would help her – neither blood-letting, popular back then, nor opium.[76] She was never properly diagnosed. The poor woman suffered so much that the heir was not even allowed near her so that he would not hear her shrieks. And later on, he was even asked to move to a different room as the princess was dying straight above his. On 12^th February 1712 the Duchess passed away. And several days later it was her heartbroken spouse, the heir to the throne, the Duke of Burgundy who was covered in spots. The pain all over the Dauphin's body soon became intolerable. According to himself, it felt like everything was burning inside him.[77] Six days later, on 18^th February 1712, the Duke of Burgundy died. The reason was unclear.

He left two infant orphans, one of whom became the heir to the French throne. And this time germs, bacteria and viruses demonstrated amazing selectivity. For some reason they aimed to attack only the heirs to the French throne. The five-year-old Duke of Brittany and his three-year-old brother, Duke of Anjou, fell ill just two weeks after their parents had died. Did they contract the disease from them? No, they did not. The children were diagnosed with scarlet fever whereas their parents died of a strange fever which looked like measles.[78] Can you see the logic? As soon as one becomes the heir to the throne, one gets fatally ill and will die imminently. Having been the heir for as little as 17 days, the infant duke died on 8^th March 1712.

This was the third heir of the 74-year-old Sun King who died within a short period of time. The three-year-old boy who got infected together with the heir hovered between life and death for several days and was considered hopeless. They say that the King ordered to find some sort of an antidote and, eventually, the child survived.[79]

Mathematics is a precise science. History surrenders here. To solve a mathematical problem we are given precise data, otherwise nothing will work out. In case of history we have altered and retold stories and no data whatsoever. Were the Sun King's relatives poisoned? To answer this question we need to know how many servants accidentally fell out of the window, quitted the job all of a sudden or drowned in the nearest pond around that time. How many cooks were hanged or died in the prime of their lives whilst on duty. Who of the court nobility and those who were close to the victims suddenly and mysteriously solved all their financial problems. How many Surgeons in Ordinary to the King choked on a steak or froze to death in the forest following an accidental fall off their horse. We need to know whether anyone else died in the Royal Palace or was the epidemic always confined to the heir to the throne. But we do not have that information at our disposal…

What would you do if you were an old king whose heirs are dying one by one? Would you become more cooperative during negotiations? The question is difficult and everyone decides for themselves. The Sun King agreed to negotiations. The Treaty of Utrecht was signed in 1713 which consigned the eleven years that France spent fighting to waste.[80] After that, the heirs to the French throne stopped dying. The five-year-old infant, the Sun King's great grandchild and the future Louis XV, became the heir. An infant Dauphin by a 74-year-old king, who can die of old age any moment. Should the King die, who will protect and help the child? France would have found itself in a very tough situation if it had not been for the handsome 28-year-old Duke of Berry, the second grandson of Louis XIV and the heir's uncle. It was him that the elderly king entrusted with looking after the country and the young king. And… yes, your guess is right, the Duke of Berry died very soon, too. He was injured while hunting and hit the saddlebow very hard.[81] It is usually said that he fell off his horse and died. Allegedly, he broke his neck or spine. But this is not true. The poor duke died on 4^th May 1714 after a four-day-long illness. Now it is more common to say that he died of internal injuries caused by the fall.[82] Could this have happened? Yes, it could have unless another participant of turbulent politics of the time had not died in a similar way having fallen off his horse…

After the accident that happened to his grandson Louis XIV lost interest in life. Fearing further accidents, he went as far as to change the law. Previously, only children born by the queen could be the heirs to the throne. Louis XIV had several illegitimate children. The King legitimated them and put them at the top of the royal hierarchy straight after the princes of the blood. A couple of months later, Louis XIV especially stipulated the following: should the legitimate kin be extinct the new princes would be able to inherit the throne. He knew who was trying to destroy his family and realised that the series of deaths was not incidental and more deaths could follow.

In 1715 the Sun King passed away. End of story, it would seem. However, it was just the beginning. Less than a year after the old King's death, the shareholders of the Bank of England proved to be right in their suspicions. Someone tried to steal their know-how, their invention, in a most impertinent way. To copy it, just as sly Chinese manufacturers copy the looks of famous car brands. It turned out to be impossible to keep the secret of the 'printing machine'. Its advantages and amazing simplicity were obvious. Instead of the complicated procedure of extracting gold and silver there came the simple process of printing money. France, which lost in the war due to 'credit deficiency', decided to create its own 'printing machine'. In 1716 a Scotsman called John Law received a patent for opening a private bank with the right to issue bank notes that could be exchanged for metal.[83]

The French king, Louis XV was a still a child and obviously was not very interested in financial issues. His Regent, Philippe II, Duke of Orleans, on the other hand, seized on this brilliant idea. He ordered that bank notes were to be accepted as payments as well as coins. In 1718 Law's bank was renamed into Banque Royale.[84] Although, essentially, it was the same 'joint stock company' where shares were divided between cunning bankers and the Royals. From now on the military and diplomatic rivalry between England and France also takes a secret financial turn. Two groups of bankers who received two different governmental protections were fighting each other for the right to uncontrollably print unsecured money. And through that to rule the whole world.

But we have been distracted. Let us go back to the French attempt to clone the 'English idea of paper money. The story of rapid development of England during the reign of William started repeating itself in France. It is not surprising – your personal economy will immediately flourish as well if your find a briefcase full of money in the street. The Central Bank of France was very successful. In one fell swoop, John Law solves all the financial problems of the royal house: he lends 100 million livres to the Government at a 3% annual interest rate. For reference: when the Sun King died there was as little as 700 thousand livres in the treasury.[85] At the end of 1716, on the other hand, when John Law turned his printing machine on, the budget deficit had reached 140 million livres[86] and France could now proceed with its global expansion as it had the money for it.

The French copied the system established by the English not only in its essence but also in details. The authorities leased to John Law the exploitation of gold deposits in Louisiana as well as all trade overseas. It would all be dealt with by the India Company which was a full copy of the British East India Company. Shares of the new company were at first sold to anyone and later on, only to those who paid with bank notes which could be received in exchange for gold coins. 'It turned into a competition – who could get rid of their gold first'.[87] But the success did not last long, in fact it was surprisingly short. The credit and monetary basis of the French expansion was destroyed within literally a few months.

This is the chronology of prosperity and immediate death of the Bank of England's clone in France. In January 1720 banker John Law rises on the surge of phenomenal success of his creation and is put in charge of controlling all financial affairs of France, since the Bank which he was the head of had just lent France 100 million livres. And at this point something terrible happened. 'Immediately and very rapidly disturbing news spread around Paris and the whole city found itself in the state of atrocious panic', recalls the French writer Guy Breton in his book 'Love Stories throughout the History of France'.[88] And already in early 1720 those who wanted to exchange their paper money back to gold started applying great pressure on the bank. At first, the exchange had to be slowed down and later on frozen altogether.[89] When did it happen? In February-March, 1720.

Since it all happened such a long time ago, it is hard to track how the panic among shareholders was organised, but in my opinion those technologies were not very different from the ones used today. I would like to draw your attention to the fact that it happened three years after the Bank started operating, which means that at the beginning it was doing pretty well. And then, all of a sudden, things got worse – after the record-breaking loan of 100 million livres received by the government. Was this a coincidence? Judge for yourself – the blow was quick and merciless. The Bank that issued 3 billion worth of paper money under the warranty of 700 million in coins was unable to pay back. But the French Government did not give up without fighting. And it managed to find a very 'original' way out. As the population would not want to use paper bills and preferred coins… using coins should be prohibited. 'The decree of 11^th March 1720 banned using coins from 1st May onwards; if found on someone, coins were to be confiscated'.[90]

You can imagine the reaction this decision caused in France. Of course, universal jubilation and enthusiasm of the public. After this decree, the popularity of paper money went down to the very bottom, as well as the popularity of the royal power. Everyone started hunting the forbidden coins and avoiding the allowed banknotes. And this quickly ended in a catastrophe. The next decree published on 22^th May 1720 announced a reduction of the nominal rate of banknotes by half.[91] Therefore, those who obeyed the previous decree and had started using paper money immediately lost half of their savings. Then, on 10^th October 1720 a third decree was published which announced that banknotes would no longer be used after 1st November 1720. Small banknotes were to be exchanged for state bonds with another half-reduction of the nominal rate.[92]

As a result, obedient citizens were quickly robbed twice. Obviously, the royal government which did all these tricks (very similar to Russian reforms) became very unpopular. It was then that the hatred for the French monarchy was planted which would lead to a revolution in 1789 and would completely destroy the royal authority. In November 1720 the Central Bank went bankrupt and its founder had to flee from France a month later. It would be interesting to find out where, because it would shed light on many things…

I do not know much about the following years of the founder of the 'printing machine' in France. But I do know what happened to the founder of the Bank of England. As we remember, William III of Orange, the English king, had a deal with bankers. And he kept his promises. Possibly because his death was also very timely. In March 1702 he passed away in the Kensington Palace of… (not again?!) injuries he got as a result of a fall off his horse.[93] Could this have happened? Yes. Only two facts seem suspicious: the similar death of the Duke of Berry and the official reason of William's death as it was announced. What was it exactly that caused his death? William died of pneumonia, which was a complication to a broken shoulder, which the King broke when he fell off the horse. Who would have thought that a broken shoulder can start pneumonia? What is the connection between a fracture and pneumonia? It is all rather interesting, is it not? And rather suspicious, too…

The founder of whatever it is, is needed for a figurehead. It is this king that signed all the laws that the bankers needed, he gave them everything they needed at the time. The following kings would receive the established system as legacy. And the secrets of William's agreements died with him and his descendants were left with the King's stern look from the full-dress portrait. The Bank of England would be a given entity for the new monarchs, certain legacy and an irreversible decision of their ancestor.[94]

It was high time they started thinking of further steps in establishing world hegemony. There had always been one means to achieve that – by declaring a war. The British elite, led by bankers, added another one to the world's geopolitical arsenal, and it was special operations. Both should be generously accompanied with money, seeing that now it was made out of nothing. The War of the Spanish Succession was the beginning of a long way of the 'printing machine' to the July morning in 1944 in Bretton Woods, where the pound sterling passed the baton to the dollar. When it was time to change location the 'printing machine' moved overseas where it was more secure.

But before that there was WWI which destroyed the golden rouble and the golden Deutsche Mark. They were followed by the currencies of the Austro-Hungarian Empire and the Ottoman Empire. Only one step was left till the world supremacy, only one world war. And the scenario of the Second World War which was written in London was very different from the one that happened in reality.

…And the most important rule is that there are no rules.

3

Six Spy Stories, or The Amazing Adventures of Ribbentrop in Russia

1

http://www.glossary.ru/cgi-bin/gl_sch2.cgi?R0pDuxzkgwxyiltt:p!xywup.

2

As examples of a country with partial sovereignty; Germany, France and India can be mentioned. Do you trust to find your country in this list, dear reader? Can you with hand on heart, quite honestly say that the government of your country acts in the interests of your country, and does not act under the pressure of Washington or London?

3

http://www.rodon.org/polit-100903111615.

4

The population of Germany numbered 67 million, and the population of France 39 million. That's why the 'militarization' of Germany was less than that of France percentage-wise – 1.2% against 2%. (Isaev A. V. Antisuvorov. Moscow: Exmo, Yauza, 2004; http://militera.lib.ru/research/isaev_avl/04.html).

5

http://germany-germaniya.de/naselenie-germanii.html.

6

http://grani.rU/Politics/World/US/Us_politics/m.74496.html.

7

In 2010 it will amount to 1.4 trillion US dollar.

8

'Quite by chance' it has grown by 40 times (http://www.narkotiki.ru/ocomments_6728.html).

9

For no apparent reason, merely out of considerations for prestige, the USSR strived to maintain the military balance up to the last decimal place. I.e. if the USA had 4000 nuclear warheads, we had also to have 4000, even though 2500 nuclear devices were enough to destroy all flesh on the Earth several times.

10

It was dissolved on 1st July 1991. As Gorbatchev was told that there were no guarantees of NATO dissolution, and it was necessary to get such first, he replied: 'What will the West need NATO for, once we have dissolved the Warsaw pact?' The West played up to him readily. On the 19-21 November, on the plenary meeting of the heads of OSCE countries in Paris, the Charter for a New Europe was adopted: 'The era of confrontation and division of Europe has ended… New partnership will be built… Security is indivisible' (Utkin, A. General Secretary's Betrayal. M.: Algoritm, 2010. P. 96.). Where is this declaration now? Who executes it? Who observes it?

Since we have touched upon the Eastern Europe – please, note that none of the former USSR allies became neutral, i.e. independent. All of them entered NATO. That confirms once again the old truth: if you do not control something, this 'something' will be controlled by somebody else. And this 'somebody' will never be neutral. If you renounce your control over something, this control will be just taken over by your rival. That is all.

11

Gorbatchev learned about the dissolution of the country which he had been ruling, from mass-media. He was very offended by the fact that Yeltsin did not call him but George Bush.

12

Gorbatchev's achievements in German reunification are enormous and undeniable. It is not for nothing that he was conferred with a title of 'the best German. The thing is that he was the one who insisted on the scenario that was realised in reality. Germany's allies in NATO – Great Britain and the USA – vehemently opposed to the restoration of Germany's unity. A certain interim period was suggested. The Anglo-Saxons have always been afraid of independent and strong Germany, and this argument will have importance in their policy as long as Germany is powerful. And having done so much good for the Germans, Gorbatchev did as much bad for Russians. As of today, the Russian people is the most numerous divided people not only in Europe but in the whole world! There are Russians left beyond the borders of Russia and Belorussians and Ukrainians, that are not three 'fraternal' peoples but one people. A unified country was cut into pieces, a unified people was divided. So, why is Gorbatchev so disliked in his motherland?

13

The Germans were mad with happiness and were ready to sign any conditions of reunification. Including leaving NATO for the unified FRG. Gorbatchev took their word for it. When, a bit later, withdrawal of Russian troops from the former GDR was discussed, Germany was ready to pay any amount as compensation. And this is understandable – how much does it cost to unify a people? No amount of money can be excessive here. Gorbatchev refused to take the money although the USSR had to take loans from the West at the time. As a result the troops were withdrawn into the fields. Why hurry? The troops needed to be withdrawn slowly, to make sure that unified Germany was neutral and kept to its obligation on leaving NATO. Nothing better than a 100,000 strong army has been invented to control politicians over keeping their promises.

14

The share of gold in the Russian gold and foreign currency reserves is less than 10%.

15

We mean countries whose currencies are not considered reserve currencies. More information on this system below.

16

This organisation has many names – FRB, The Federal Reserve, The Federal Reserve System, The Fed etc.

17

We will speak of peculiarities of the dollar, its history and its numerous varieties in one of the chapters of this book.

18

Or Act of December 23, 1913 / http://www.federalreserve.gov/pubs/Federies/Federi.htm.

19

http://www.federalreserveeducation.org/fedl01/structure.

20

You will find more information on establishment, structure and functioning of the Fed in my book called 'Crisi$: How is It Organized', therefore we will not go into too much detail here.

21

Banknotes and coins of the Federal Reserve System of the USA: Reference Book. Moscow: IPK 'InterKrim – press'. 2008. P. 10.

22

Each Federal Reserve bank is assigned its own number and letter. If you look at the front of the banknote, you will see the mark below the serial number on the left side of the note: A1 – Boston, B2 – New York, C3 – Philadelphia, D4 – Cleveland, E5 – Richmond, F6 – Atlanta, G7 – Chicago, H8 – St. Louis, 19 – Minneapolis, J10 – Kansas City, K11 – Dallas, L12 – San Francisco.

23

http://rosfincom.ru/news/1849.html.

24

Thus, the issues of the financial universe on the global scale are resolved by thirteen people: a banker from each of the twelve federal reserve banks plus the Chairman of the Fed.

25

www.federalreserve.gov.

26

Greenspan A. The age of turbulence: adventures in a new world. New York : Penguin Press, 2007.

27

The principle of the so-called 'independence' of the Central Bank is the basis of the world economy. It is this burden that pulls it downwards, to the bottom. We will study the situation using Russia as an example. But if you, my dear reader, start studying the law on the Central Bank of your own country, you will find the very same things in there.

28

http://base.consultant.ru/cons/cgi/online.cgi?req=doc;base=LAW;n=35977.

29

The size of the registered capital – Chapter II, Article 10.

30

To calculate the exact share of gold in our gold and foreign currency reserves, you need to go to the website of the Central Bank (http://www.cbr.ru) to the section 'International reserves of the Russian Federation'. Then you just need to divide the amount of reserves in gold by the amount of reserves in dollars and then multiply the result by 100.

31

This is legal terminology. The three stated rights: possession, use and disposal – belong to the owner of the property according to article 209 of the Civil Code of the Russian Federation. This means that the owner of the gold and foreign currency reserves is the Bank of Russia!

32

This is exactly how the Central Bank does it. The same article 2 says: 'The Bank of Russia undertakes its expenditures by means of its own profits' And what does the Bank of Russia do? Oh, it issues money. Hard work. Barely makes ends meet.

33

http://kp.ru/daily/24267/463675.

34

http://top.rbc.ru/economics/27/05/2009/306406.shtml.

35

Chapter III, article 16.

36

Yakunin V.I, Bagdasaryan V.E., Sulakshin S. S. New technologies of fighting the Russian Statesmanship. Moscow: Nauchny expert, 2009. P. 298.

37

Today there is technically no Stabilisation Fund. We do have the National Wealth Fund and the Reserve Fund. They are invested in the same 'instruments'; that is yourself at: http://wwwl.minfin.ru/ru/reservefund/; http://wwwl.minfin.ru/ru/nationalwealthfund.

38

http://www.minfin.ru/ru/official/index.php?pg4=34&id4=5631.

39

http://wwwl.minfin.ru/ru/reservefund/management/ and http://www.dohodnoemesto.ru/news/2009-01-23/45.

40

This is a very peculiar provision. It just says 'submit'. But it is not mentioned that in case of a negative resolution of the bankers regarding the bill, the institution cannot be shut down.

41

http://www.constitution.ru.

42

http://www.cb r.ru/print.asp?file=/statistics/credit_statistics/refinancing_rates.htm.

43

From 15^th October 1993 to 28^th April 1994.

44

Greenspan A. The age of turbulence: adventures in a new world. New York : Penguin Press, 2007.

45

Yakunin V. I, Bagdasaryan V. E., Sulakshin S. S. New technologies of fighting the Russian Statesmanship. Moscow: Nauchny expert, 2009. P. 297.

46

Ibid.

47

http://www.2uk.ru/business/bus59.

48

Ibid.

49

Green J. R. History of the English people. IndyPublish, 2008.

50

In English history this coup d'etat is known as the Glorious Revolution.

51

Another detail – by that time the Netherlands where William of Orange ruled had become the centre of world trade and banking. The 'Scottish' bankers might have been from there. There is different information on the nationality of the bankers who came up with the idea and created the first money printing machine. They could have been Scottish, English, Dutch or Jewish – there are different opinions. One thing is certain – in a very short period of time the bankers entered the elite of the English society and became tightly interwoven with the British royal authorities.

52

http://www.allmonarchs.net/uk/william_iii.html.

53

Winston Churchill himself did not bear the title of the Duke of Marlborough as it was given to the eldest son in the family. And Winston was a descendant of the younger son, and, what is more, his mother was American. His uncle became the Duke and after that the title was conferred to a different branch of the Churchill family tree.

54

Betrayals of top military officers and their participation in takeovers normally have very firm material basis which works perfectly with personal dislike of the person to be taken over and secret grudges. John Churchill, in his youth, was a page-boy of the heir to the throne. Later on, the heir became James II and John Churchill became a general and a baron. And then betrayed his benefactor.

55

World History // English Revolution. M.: AST, 2000. P. 8-9.

56

This practice of the English should be actively used. As even now, at the beginning of the 20^th century Russia still has not dared to act as decisively in certain sectors of its economy where unprocessed raw materials are still exported.

57

In those times annual income of 20 pounds was considered very high. Therefore the Bank of England did not issue bank notes with a value of less than 20 pounds (not to waste any effort on change). The majority of the population did not use the products of the Bank of England and did not even come across it.

58

In France women voted for the first time in 1945. And what about Russia? It happened earlier. The Bolsheviks made the right to vote universal.

59

http://velikobritaniya.org/istoriya-velikobritanii/istoriya-anglii-v-xvi-xix-veka.html.

60

Back then the front line was defined by religion. France and Spain supported Catholics who were being exterminated in England. England, in its turn, supported Protestants all over Europe.

61

Mohan A. T. The Influence of Sea Power Upon History, 1660-1783. Dover Publications Inc., 1988.

62

Green J. R. History of the English people. IndyPublish, 2008.

63

Vorobyevsky Y. Judas Order. Betrayal does not cancel victory. Moscow: Rossiysky pisatel, 2009. P. 95.

64

Mohan A. T. The Influence of Sea Power Upon History, 1660-1783. Dover Publications Inc., 1988.

65

Spain owned most of Italy and Southern Netherlands in Europe, as well as territories in South, Central and North America, Africa, the Canary Islands, the Antilles and the Philippines. In 1700 the Spanish king died having left no direct heir. Late King Charles II of Habsburgs was related to Louis XIV and the emperor of the Holy Roman Empire, Archduke of Austria Leopold I of Habsburg.

66

Mahan A. T. The Influence of Sea Power Upon History, 1660-1783. Dover Publications Inc., 1988.

67

Mahan A. T. The Influence of Sea Power Upon History, 1660-1783. Dover Publications Inc., 1988.

68

http://www.megabook.ru/Article.asp?AID=635974.

69

From the Latin word 'camisade' – shirt. The protestants attacked at night and put on white shirts over their clothes. Sort of basmachi or Chechen separatists. All the three types of rebels fought the 'unfaithful' for the 'freedom of faith', and actually served as cannon fodder, helping the English weaken their political rivals.

70

James's supporters are known as Jacobites and they attempted to organise a plot in England.

71

World History // The Age of Enlightenment. Moscow: AST, 2001. P. 306.

72

http://www.passion.ru/s.php/1416.htm.

73

http://www.louisxiv.ru/finale.html.

74

http://n-t.ru/ri/gd/yd07.htm.

75

http://www.newsru.com/world/01jun2001/napoleon.html.

76

http://www.louisxiv.ru/finale.html.

77

http://www.louisxiv.ru/finale.html.

78

http://www.erlib.com/Ги_Бретон/От_великого_Конде_до_Короля-солнце/15.

79

The baby, future King Louis XV, survived thanks to the fact that at his age he was still partially breast-fed, and poisoning him was slightly more difficult.

80

The English achieved all their goals: they weakened France and stopped Austria from strengthening. And having agreed with the French candidate for the Spanish throne Philip V, they managed to get a formal prohibition for him to become the next French king. It meant that Spain and France could not merge into one superpower. By the way, this is when England obtained an important part of the Spanish territory – Gibraltar. And apart from that, the Isle of Menorca and the French territories in North America (the land around Hudson Bay and Newfoundland). But the most important English acquisition was the Asiento. This was the exclusive permission to sell slaves from Africa to Spanish territories. England became the only country entitled to do slave trade. And it did a good job and brought slavery overseas. Wherever the British came, it is slaves who started working. Another story, which we will leave beyond this book, is white slaves of the English. They were mostly Irish. English laws did not provide for any punishment for a murder of an Irishman committed by an Englishman. Because an Irishman living in Ireland occupied by the English was a second class person even being free. Because the Irish were Catholics, whereas England was Protestant, and even more than that – it had its own Anglican church.

The English did not forget Russia either: English money and diplomatic support helped Sweden, making it pursue wars with Russia until 1721. And Charles XII who strived to achieve peace, died very promptly after returning to Sweden in 1718. He was killed by a stray bullet in a trench during an operation in Norway. Do you recognise the style? His sister, Ulrika Eleonora, stopped peace negotiations and continued the war for three more years.

81

http://www.louisxiv.ru/finale.html.

82

http://wiki-linki.ru/Citates/49719/3.

83

Do pay attention that the idea came from a Scottish banker again.

84

http://www.icpress.ru/information/articles/?ID=4310.

85

World History // The English Revolution. Moscow: AST, 2000. P. 284-286.

86

http://www.erlib.com/Ги_Бретон/От_великого_Конде_до_Короля-солнце/16.

87

Ibid.

88

http://www.erlib.com/Ги_Бретон/От_великого_Конде_до_Короля-солнце/16.

89

http://www.icpress.ru/information/articles/?ID=4310.

90

http://www.icpress.ru/information/articles/?ID=4310.

91

Ibid.

92

Was it the governmental reforms of young Louis XV that were used as a template by the reformers of the 90s for their strategy? They are just so similar! People's saving accounts were frozen and then devaluated by means of hyperinflation. As a result, the cost of a flat became equal to the cost of a chocolate bar. In France it was decided to clear the rest of the state debt for bank notes through 2% and 4% life annuities.

93

http://encyklopedia.narod.ru/bios/gov/ko nigen/england/stewart/william3/william3.html.

94

Do you know who William Ill's heir was? This is quite interesting. Apparently, William III, who dethroned James II, was married to James's daughter called Mary Stuart. The defeated king had two daughters, and the second one was called Anna. This charming creature publicly betrayed her father and joined her sister's husband under the 'influence' of John Churchill, who later became her 'blue-eyed boy'. William of Orange and Mary had no children, and therefore Anna Stuart became the heiress to the throne. Just like in mathematics, changing the order of addends (kings) did not change the sum (the right for the throne) for this girl.

95

Statement of 22.07.1941 (Adolf Hitler, Norman Cameron, R. H. Stevens, Hugh Redwald Trevor-Roper. 1941-1944: His Private Conversations. Enigma Books, 2000, P. 11).

96

Do not help those who lie to you – they always try to draw you into the field of emotions and not facts. Take a small step – say the there was no Molotov-Ribbentrop Pact, there was just a non-aggression treaty between the USSR and Russia.

97

Please note that Hitler, according to historians, was going to conquer the whole world but for some reason half a year before the beginning of the war he still had no plans to attack Poland which would be the starting point. The Fiihrer will start the war without any aggressive plans against England or France. This is a rather strange aggressor, is it not? Or Hitler was for some reason convinced that London would not protect Poland.

98

NarochnickayaN. A., Falin V.M. The Score of the Second World War. Who started the war and when? Moscow: Veche, 2009. P. 76

99

It was not by accident that I give you a brief story of swift rapprochement of Germany and the USSR in August 1939. Dates are essential here. This is what the chief of the German Army General Staff, France Haider, wrote in his diary on 15 August, 1939: 'No changes are expected until the evening of 19 August. No changes in operation of public transport until 22 August… The cancellation of the party rally should be kept secret… The location and time of strikes, the date of the surprises remain unchanged'. (Haider E War private journal of Generaloberst Frans Haider… [United States] : A.G. EUCOM, 1947.). That means that the Germans were working hard on preparing their offensive operation against Poland. Despite the fact that on 15 August, 1939 there was no pact with Russians – there was not even a draft, no negotiations are being held. There was nothing and yet the German military machine was actively preparing for war. Even on 4 August there was no certainty that Stalin would change his opinion concerning Germany. This shows in the cable from the German ambassador, Schulenberg, from Moscow: "The Soviet Government is actually more inclined to improve the relations between Germany and the USSR, but the old mistrust towards Germany is not yet extinct. My general impression is that the Soviet Government is determined to sign an agreement with England and France…' We can read this… in Churchill's book. (Churchill W. The Second World War. Volume 1: The gathering storm. London: Cassell, 1964). But contemporary liars in history only try to sound plausible to the ignorant. They appeal to emotions. But once you open a book, even by Churchill, who was not particularly friendly to Russia, all accusations dissolve as mist in the morning. Do not believe liars in history. Read books and judge for yourself.

100

Not only were the Polish not preparing to protect themselves against Hitler but they were actually planning an attack themselves. But all their fortifications were on the Russian border, not German. For more information on what the Polish government did to ruin their own country see: Starikov N. Who Forced Hitler to Attack Stalin? St. Petersburg: Piter, 2010 (In Russian).

101

In my next book, if I have enough time and am in sufficient health, I will write about the reasons for the tragedy that happened on 22nd June, 1941.

102

Narochnickaya N. A., Falin V.M. The Score of the Second World War. Who started the war and when? Moscow: Veche, 2009. P. 27.

103

Ibid. P. 212.

104

Ibid. P. 91.

105

The Second Congress of People's Deputies of the USSR was held on 12-24 December, 1989.

106

NarochnickayaN. A., Falin V.M. The Score of the Second World War. Who started the war and when? Moscow: Veche, 2009. P. 115.

107

Ibid. P. 115.

108

I dedicated another book, 'Who Forced Hitler to Attack Stalin?' (St. Petersburg: Piter, 2010), to detailed demonstration of this statement. It is impossible to give all arguments within this book. Therefore, we will confine ourselves to a brief listing.

109

According to Churchill, they produced as many weapons as the whole British Empire altogether.

110

The war between Russia and Germany was to break out on the grounds of Transcarpathian Ukraine. This region was once a part of Austria-Hungary, then Czechoslovakia and then Slovakia. Hitler was going to annexe it as a part of the Reich, and that would have served as an excuse for a war. Both the USSR and Germany had parts of the Ukraine. Instead, the Fuhrer gave the Transcarpathian region to the Hungarians in March 1939. And immediately the West decided to punish him, and Poland forgot about its friendship with the Reich. Within literally 24 hours.

111

Narochnickaya N. A., Falin V.M. The Score of the Second World War. Who started the war and when? Moscow: Veche, 2009. P. 148.

112

Ibid. P. 148-149.

113

Here are just some facts. Great Britain was Japan's ally during the Russo-Japanese war of 1904-1905. As a result of the war. Japan annexed Korea, which went unnoticed by the Anglo-Saxons. After the Japanese invasion of China, despite enormous casualties on the Chinese side, Great Britain blocked all accusations of Japan's aggression as a member of the League of Nations. In total, between 1931 and 1945 as a result of the Japanese aggression, 35 million people died in China (Narochnickaya N. A., Falin V. M. The Score of the Second World War. Who started the war and when? Moscow: Veche, 2009. P. 54). And finally, while the delegations from England and France were getting ready for negotiations in Moscow, on 24^th July 1939 London and Tokyo signed a treaty which completely recognised the existing situation in China'. This was a blessing for a war with Russia. For a full-scale war…

114

Russia did not lose the war with Japan in 1905. We were forced to sign a peace treaty! Russia was forced to do that by means of revolutionary action, strikes, terrorist attacks and 'mutinies' in the fleet. All revolution was the result of excellent work of the foreign special services. For example, the mutiny on the Potemkin started with a soup in which the sailors found living worms. Their indignation was just – they were being fed rotten food! And it did not occur to anyone that boiling the soup would have surely killed the worms and there was no way they could still be alive. Someone purposely threw living worms into the food AFTER it had been cooked. And this is just one of the examples: the most telling one. The peace negotiations were initiated by… Japan. Two days after the battle of Tsushima the Japanese offered a peace treaty. Because they realised that it was impossible to win a long war with Russia. You can read more on how the English were forcing Nikolas II to sign the peace treaty with the help of the revolutionaries (and most importantly, why?) in: StarikovN. Who funds disintegration of Russia. From Decembrists to Mujahids. St. Petersburg: Piter, 2010.

115

NarochnickayaN. A., Falin V.M. The Score of the Second World War. Who started the war and when? Moscow: Veche, 2009. P. 81.

116

NarochnickayaN. A., Falin V.M. The Score of the Second World War. Who started the war and when? Moscow: Veche, 2009. P. 149.

117

For more information on this subject see: Starikov N. Cherchez la Oil. St. Petersburg: Piter, 2010.

118

Narochnickaya N. A., Falin V.M. The Score of the Second World War. Who started the war and when? Moscow: Veche, 2009. P. 150.

119

Very often, to demonstrate Stalin's silliness or cowardice, people mention the trains full of crops which crossed the Russian-German border up until 22 June. But it was not due to cowardice or fear; the USSR was paying back its loan. Or do those who condemn Stalin not pay their loans back? First, Germany supplied machines, weapons and a lot of other things to the USSR, and then the USSR paid the debt back over several years. It was a bargain. It is not the USSR that financed Hitler, but Hitler who financed the USSR. Stalin squeezed everything possible out of Hitler. Who can say exactly how much of the loan we paid back before the beginning of the war and how much was left? Who remembered our debt in 1946 when the loan contract expired? If this is not a victory of the Russian diplomacy, then what is a victory?!

120

Bulok A. Hitler and Stalin. Smolensk: Rusich, 1994. P. 237.

121

Falin V. The Second Front. Anti-Hitler Coalition: conflict of interest. Moscow: Centrpoligraph, 2000. P. 121.

122

The Year of Crisis. 1938-1939: Documents and Materials: 2 Volumes. Moscow: Izdatelstvo politicheskoy literatury, 1990. V. 2. P. 303.

123

Narochnickaya N. A., Falin V.M. The Score of the Second World War. Who started the war and when? Moscow: Veche, 2009. P. 93.

124

Fest J. Adolf Hitler: In 3 volumes. Perm: Aleteya. V. 3. P. 160.

125

Ibid. P. 233-234.

126

Narochnickaya N. A., Falin V.M. The Score of the Second World War. Who started the war and when? Moscow: Veche, 2009. P. 152. Hitler was vegetarian and did not drink.

127

For some reason those who write about the Molotov-Ribbentrop pact make it sound like Hitler, once he had signed the treaty, was ready to be 'friends' with Russia forever. For a man as cynical as Hitler, a treaty was nothing but a paper. And he was not going to adhere to it forever from the very beginning. He could have easily exchanged it or traded it for more preferences from his beloved Britain. This is what happened in reality. By 25^th May Hitler had already sent Dalerus, who was a Swedish manufacturer, a relative and a friend of Goering's, to London. And up until 1st September, 1939 active work on diplomatic channels was taking place. But the English decided that Hitler's word was worth nothing and therefore declared war against him: in actual fact, they were not pursuing any war, and promised to stop it provided that Hitler would fulfil his obligations and attack Russia. And they kept pushing Hitler until he finally gave London satisfaction on 22 June 1941.

128

NarochnickayaN. A., Falin V.M. The Score of the Second World War. Who started the war and when? Moscow: Veche, 2009. P. 151.

129

Falin V. The Second Front. Anti-Hitler Coalition: conflict of interest. Moscow: Centrpoligraph, 2000. P. 112.

130

Grotov G. Hermann Goring – the Marshall of the Reich. Smolensk: Rusich, 1998. P. 323-324.

131

Putlitz W. G. Unterwegs nach Deutschland. Erinnerungen eines ehemaligen Diplomaten. – Berlin (Ost): Verlag der Nation, 1958

132

Those who are at least a little bit familiar with the principles of the English policy are bound to know that the main principle is to fight using others. Britain has always tried to 'get rid of its rivals with the help of other countries. Spain was weakened by the revolt in the Netherlands then Holland was defeated on land by the French. When France became the main rival of the Anglo-Saxons, she was eliminated' by Russian troops in 1812-1814. The principle did not change later. In the First World War the two enemies of England – Germany and Russia – mutually destroyed each other. The same principle was going to be applied to the Second World War. The following fact is rather telling: on 27^th April, 1939 the law on universal military service was passed in Great Britain. But it remained on paper even after the world conflict had started. It is enough to say that 24-year-old Brits were only asked to arrive at recruiting stations as late as March 1940 – that is six months (!) after London declared war on Germany (on 3 September 1939). (Maysky I.M. Memoirs of a Soviet Diplomat. Tashkent, 1980. P.387). When Hitler was destroying Poland, the English were dropping leaflets over German territory. Over the first month of the war they dropped 18 million leaflets. This was how the British helped Poland. The English wanted to stay 'second' and avoid fighting themselves.

133

Gladkov T. His Majesty the Agent. Moscow: Pechatnye tradicii, 2010.

134

http://www.vesti.ru/doc.html?id=353153.

135

Apparently, Lehmann's supervisors had diplomatic cover and were deported from Germany together with all Soviet diplomats. This by itself provides food for thought. We were so convinced that there was no threat coming from Germany that there were no other ways of contacting this agent!

136

http://kp.ru/daily/24478.3/635042.

137

http://kp.ni/daily/24478.3/635042.

138

http://kp.ni/daily/24478.3/635042.

139

We will mention in passing what the author of the memoirs said about England's attitude towards the Reich: '…In England there was no sign of negative or hostile feeling towards the Third Reich. On the contrary, the press did its best to avoid what the Nazis called 'stigmatisation. The only exception was the communist newspaper 'Daily Worker' which was, however, impossible to buy at any stand… The Brown Book of the Reichstag Fire and other anti-Nazi books were normally only sold under the counter and could not be seen in big book shops.' (Putlitz W. G. Unterwegs nach Deutschland. Erinnerungen eines ehemaligen Diplomaten. – Berlin (Ost): Verlag der Nation, 1958). At the time Hitler was the favourite and the most promising project of the English who was expected to attack Russia in was written, nothing was sold. Freedom of speech in operation. There were no books on Hitler's crimes but in the same year, 1936, the Anglo-German Fellowship was founded in London. Its only task was to spread the ideas of friendship and cooperation with the Third Reich among the English public. Such organisations do not appear on their own without being sanctioned by government. Just look at it, is this not interesting? When there was no Hitler, there were no ideas of friendship and cooperation with Germany, and once Hitler came to power the British authorities became eager to be friends with Germany.

140

In the history of recruiting Soviet spies by foreign special services, in the majority of cases it happened abroad, where the Soviet spies were working under a diplomatic or a different type of cover. One of the most famous examples – Suvorov-Rezun, who got into a honey trap. Typical.

141

http://militera.lib.ru/memo/german/putHts_vg/03.html – Original: Putlitz W. G. Unterwegs nach Deutschland. Erinnerungen eines ehemaligen Diplomaten. – Berlin (Ost): Verlag der Nation, 1958.

142

Ibid. P. 260.

143

Lord Vansittart was the Permanent Under-Secretary at the Foreign Office.

144

Putlitz W. G. Unterwegs nach Deutschland. Erinnerungen eines ehemaligen Diplomaten. – Berlin (Ost): Verlag der Nation, 1958.

145

Putlitz W. G. Unterwegs nach Deutschland. Erinnerungen eines ehemaligen Diplomaten. – Berlin (Ost): Verlag der Nation, 1958.

146

Ibid.

147

The USA went even further than that. At the beginning of the war with Japan, the Americans imprisoned not only Japanese citizens but even American citizens of Japanese origin. And they kept them in jail until the autumn of 1945, that is until the very end of the Second World War.

148

Putlitz W. G. Unterwegs nach Deutschland. Erinnerungen eines ehemaligen Diplomaten. – Berlin (Ost): Verlag der Nation, 1958.

149

Ibid.

150

While Ribbentrop was in prison during the Nuremberg Trials, as a result of which he would be hanged, he managed to write some memoirs. Speaking about his trip to Moscow, he wrote the following: 'At first, I suggested sending another authorised representative to Moscow, and the first person I thought of was Goering'. (Ribbentrop J. Ribbentrop memoirs. London : Weidenfeld and Nicolson, 1953). This very interesting evidence tells us several things. Firstly, Goering indeed was ready to depart at any moment, and secondly, that Hitler decided to keep him for the negotiations in Great Britain. The circumstances could have rapidly changed.

151

Paul Schmidt did not fly in the same Junkers as Ribbentrop but on board a different aircraft.

152

Schmidt. P. Hitler's interpreter. Macmillan, 1951. P. 140.

153

Ribbentrop J. Ribbentrop memoirs. London: Weidenfeld and Nicolson, 1953.