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China, Russia and Gold in the De-Dollarizing World

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Trump Demands Tribute from NATO Vassals

The one thing that we should all understand, and which Trump perfectly and clearly understands, is that the members of NATO are a captive audience.

Strategic Culture Foundation

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Authored by Tim Kirby via The Strategic Culture Foundation:


Regardless of whether one loves or hates President Trump at least we can say that his presidency has a unique flavor and is full of surprises. Bush and Obama were horribly dull by comparison. Trump as a non-politician from the world of big (real estate) business and media has a different take on many issues including NATO.

Many, especially in Russia were hoping that “The Donald’s” campaign criticism of NATO would move towards finally putting an end to this anti-Russian alliance, which, after the fall of Communism really has no purpose, as any real traditional military threats to Europe have faded into history. However, Trump as President of the United States has to engage in the “realpolitik” of 21st century America and try to survive and since Trump seems rather willing to lie to get what he wants, who can really say which promises from his campaign were a shoot and which were a work.

So as it stands now Trump’s recent decision to maintain and build US/NATO bases across the world “and make country X pay for it” could mean anything from him trying to keep his campaign promises in some sort of skewed way, to an utter abandonment of them and submission to the swamp. Perhaps it could simply be his business instincts taking over in the face of “wasteful spending”. Making allies have to pay to have US/NATO forces on their territory is a massive policy shift that one could only predict coming from the unpredictable 45th President.

The one thing that we should all understand, and which Trump perfectly and clearly understands, is that the members of NATO (and other “allies”) are a captive audience, especially Germany, Japan and South Korea, which “coincidentally” are the first set of countries that will have to pay the “cost + 50%” to keep bases and US soldiers on their soil. Japan’s constitution, written primarily by American occupation forces forbids them from having a real military which is convenient for Trump’s plan. South Korea, although a very advanced and wealthy nation has no choice but to hide behind the US might because if it were to disappear overnight, then Gangnam would be filled with pictures of the Kim family within a few weeks.

In the past with regard to these three countries NATO has had to keep up the illusion of wanting to “help” them and work as “partners” for common defense as if nuclear and economic titan America needs countries like them to protect itself. Trump whether consciously or not is changing the dynamic of US/NATO occupation of these territories to be much more honest. His attitude seems to be that the US has the possibility to earn a lot of money from a worldwide mafia-style protection scam. Vassals have no choice but to pay the lord so Trump wants to drop the illusions and make the military industrial complex profitable again and God bless him for it. This level of honesty in politics is refreshing and it reflects the Orange Man’s pro-business and “America will never be a socialist country” attitude. It is blunt and ideologically consistent with his worldview.

On the other hand, one could look at this development as a possible move not to turn NATO into a profitable protection scam but as a means to covertly destroy it. Lies and illusion in politics are very important, people who believe they are free will not rebel even if they have no freedom whatsoever. If people are sure their local leaders are responsible for their nation they will blame them for its failings rather than any foreign influence that may actually be pulling the real strings.

Even if everyone in Germany, Japan and South Korea in their subconscious knows they are basically occupied by US forces it is much harder to take action, than if the “lord” directly demands yearly tribute. The fact that up to this point US maintains its bases on its own dime sure adds to the illusion of help and friendship. This illusion is strong enough for local politicians to just let the status quo slide on further and further into the future. Nothing is burning at their feet to make them act… having to pay cost + 50% could light that fire.

Forcing the locals to pay for these bases changes the dynamic in the subconscious and may force people’s brains to contemplate why after multiple-generations the former Axis nations still have to be occupied. Once occupation becomes expensive and uncomfortable, this drops the illusion of friendship and cooperation making said occupation much harder to maintain.

South Korea knows it needs the US to keep out the North but when being forced to pay for it this may push them towards developing the ability to actually defend themselves. Trump’s intellectual “honesty” in regards to NATO could very well plant the necessary intellectual seeds to not just change public opinion but make public action against US/NATO bases in foreign countries. Japan has had many protests over the years against US bases surging into the tens of thousands. This new open vassal status for the proud Japanese could be the straw to break the camel’s back.

Predicting the future is impossible. But it is clear that, changing the fundamental dynamic by which the US maintains foreign bases in a way that will make locals financially motivated to have them removed, shall significantly affect the operations of US forces outside the borders of the 50 States and make maintaining a global presence even more difficult, but perhaps this is exactly what the Orange Man wants or is just too blind to see.

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High-ranking Ukrainian official reports on US interference in Ukraine

It is not usually the case that an American media outlet tells the truth about Ukraine, but it appears to have happened here.

Seraphim Hanisch

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The Hill committed what may well have been a random act of journalism when it reported that Ukrainian Prosecutor General, Yuriy Lutsenko, told Hill.tv’s reporter John Solomon that the American ambassador to that country, Marie Yovanovitch, gave him a “do not prosecute” list at their first meeting.

Normally, all things Russia are covered by the American press as “bad”, and all things Ukraine are covered by the same as “good.” Yet this report reveals quite a bit about the nature of the deeply embedded US interests that are involved in Ukraine, and which also attempt to control and manipulate policy in the former Soviet republic.

The Hill’s piece continues (with our added emphases):

“Unfortunately, from the first meeting with the U.S. ambassador in Kiev, [Yovanovitch] gave me a list of people whom we should not prosecute,” Lutsenko, who took his post in 2016, told Hill.TV last week.

“My response of that is it is inadmissible. Nobody in this country, neither our president nor our parliament nor our ambassador, will stop me from prosecuting whether there is a crime,” he continued.

Indeed, the Prosecutor General appears to be a man of some principles. When this report was brought to the attention of the US State Department, the response was predictable:

The State Department called Lutsenko’s claim of receiving a do not prosecute list, “an outright fabrication.” 

“We have seen reports of the allegations,” a department spokesperson told Hill.TV. “The United States is not currently providing any assistance to the Prosecutor General’s Office (PGO), but did previously attempt to support fundamental justice sector reform, including in the PGO, in the aftermath of the 2014 Revolution of Dignity. When the political will for genuine reform by successive Prosecutors General proved lacking, we exercised our fiduciary responsibility to the American taxpayer and redirected assistance to more productive projects.”

This is an amazing statement in itself. “Our fiduciary responsibility to the American taxpayer”? Are Americans even aware that their country is spending their tax dollars in an effort to manipulate a foreign government in what can probably well be called a low-grade proxy war with the Russian Federation? Again, this appears to be a slip, as most American media do a fair job of maintaining the narrative that Ukraine is completely independent and that its actions regarding the United States and Russia are taken in complete freedom.

Hill.TV has reached out to the U.S. Embassy in Ukraine for comment.

Lutsenko also said that he has not received funds amounting to nearly $4 million that the U.S. Embassy in Ukraine was supposed to allocate to his office, saying that “the situation was actually rather strange” and pointing to the fact that the funds were designated, but “never received.”

“At that time we had a case for the embezzlement of the U.S. government technical assistance worth 4 million U.S. dollars, and in that regard, we had this dialogue,” he said. “At that time, [Yovanovitch] thought that our interviews of Ukrainian citizens, of Ukrainian civil servants, who were frequent visitors of the U.S. Embassy put a shadow on that anti-corruption policy.”

“Actually, we got the letter from the U.S. Embassy, from the ambassador, that the money that we are speaking about [was] under full control of the U.S. Embassy, and that the U.S. Embassy did not require our legal assessment of these facts,” he said. “The situation was actually rather strange because the funds we are talking about were designated for the prosecutor general’s office also and we told [them] we have never seen those, and the U.S. Embassy replied there was no problem.”

“The portion of the funds, namely 4.4 million U.S. dollars were designated and were foreseen for the recipient Prosecutor General’s office. But we have never received it,” he said.

Yovanovitch previously served as the U.S. ambassador to Armenia under former presidents Obama and George W. Bush, as well as ambassador to Kyrgyzstan under Bush. She also served as ambassador to Ukraine under Obama.

Former Rep. Pete Sessions (R-Texas), who was at the time House Rules Committee chairman, voiced concerns about Yovanovitch in a letter to the State Department last year in which he said he had proof the ambassador had spoken of her “disdain” for the Trump administration.

This last sentence may be a way to try to narrow the scope of American interference in Ukraine down to the shenanigans of just a single person with a personal agenda. However, many who have followed the story of Ukraine and its surge in anti-Russian rhetoric, neo-Naziism, ultra-nationalism, and the most recent events surrounding the creation of a pseudo-Orthodox “church” full of Ukrainian nationalists and atheists as a vehicle to import “Western values” into a still extremely traditional and Christian land, know that there are fingerprints of the United States “deep state” embeds all over this situation.

It is somewhat surprising that so much that reveals the problem showed up in just one report. It will be interesting to see if this gets any follow-up in the US press.

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President Putin’s anti-fake news law is brilliant, but the West makes more

Western media slams President Putin and his fake news law, accusing him of censorship, but an actual look at the law reveals some wisdom.

Seraphim Hanisch

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The TASS Russian News Agency reported on March 18th that Russian President Vladimir Putin signed off on a new law intended to block distorted or untrue information being reported as news. Promptly after he did so, Western news organizations began their attempt to “spin” this event as some sort of proof of “state censorship” in the oppressive sense of the old Soviet Union. In other words, a law designed to prevent fake news was used to create more fake news.

One of the lead publications is a news site that is itself ostensibly a “fake news” site. The Moscow Times tries to portray itself as a Russian publication that is conducted from within Russian borders. However, this site and paper is really a Western publication, run by a Dutch foundation located in the Netherlands. As such, the paper and the website associated have a distinctly pro-West slant in their reporting. Even Wikipedia noted this with this comment from their entry about the publication:

In the aftermath of the Ukrainian crisis, The Moscow Times was criticized by a number of journalists including Izvestia columnist Israel Shamir, who in December 2014 called it a “militant anti-Putin paper, a digest of the Western press with extreme bias in covering events in Russia”.[3] In October 2014 The Moscow Times made the decision to suspend online comments after an increase in offensive comments. The paper said it disabled comments for two reasons—it was an inconvenience for its readers as well as being a legal liability, because under Russian law websites are liable for all content, including user-generated content like comments.[14]

This bias is still notably present in what is left of the publication, which is now an online-only news source. This is some of what The Moscow Times had to say about the new fake news legislation:

The bills amending existing information laws overwhelmingly passed both chambers of Russian parliament in less than two months. Observers and some lawmakers have criticized the legislation for its vague language and potential to stifle free speech.

The legislation will establish punishments for spreading information that “exhibits blatant disrespect for the society, government, official government symbols, constitution or governmental bodies of Russia.”

Insulting state symbols and the authorities, including Putin, will carry a fine of up to 300,000 rubles and 15 days in jail for repeat offenses.

As is the case with other Russian laws, the fines are calculated based on whether the offender is a citizen, an official or a legal entity.

More than 100 journalists and public figures, including human rights activist Zoya Svetova and popular writer Lyudmila Ulitskaya, signed a petition opposing the laws, which they labeled “direct censorship.”

This piece does give a bit of explanation from Dmitry Peskov, showing that European countries also have strict laws governing fake news distribution. However, the Times made the point of pointing out the idea of “insulting governmental bodies of Russia… including Putin” to bolster their claim that this law amounts to real censorship of the press. It developed its point of view based on a very short article from Reuters which says even less about the legislation and how it works.

However, TASS goes into rather exhaustive detail about this law, and it also gives rather precise wording on the reason for the law’s passage, as well as how it is to be enforced. This law is brilliant, for it hits the would-be slanderer right where it counts – in the pocketbook.

We include most of this text here, with emphases added:

Russian President Vladimir Putin has signed a law on blocking untrue and distorting information (fake news). The document was posted on the government’s legal information web portal.

The document supplements the list of information, the access to which may be restricted on the demand by Russia’s Prosecutor General or his deputies. In particular, it imposes a ban on “untrue publicly significant information disseminated in the media and in the Internet under the guise of true reports, which creates a threat to the life and (or) the health of citizens, property, a threat of the mass violation of public order and (or) public security, or the threat of impeding or halting the functioning of vital infrastructural facilities, transport or social infrastructure, credit institutions, energy, industrial or communications facilities.”

Pursuant to the document, in case of finding such materials in Internet resources registered in accordance with the Russian law on the mass media as an online media resource, Russia’s Prosecutor General or his deputies will request the media watchdog Roskomnadzor to restrict access to the corresponding websites.

Based on this request, Roskomnadzor will immediately notify the editorial board of the online media resource, which is in violation of the legislation, about the need to remove untrue information and the media resource will be required to delete such materials immediately. If the editorial board fails to take the necessary measures, Roskomnadzor will send communications operators “a demand to take measures to restrict access to the online resource.”

In case of deleting such untrue information, the website owner will notify Roskomnadzor thereof, following which the media watchdog will “hold a check into the authenticity of this notice” and immediately inform the communications operator about the resumption of the access to the information resource.
The conditions for the law are very specific, as are the penalties for breaking it. TASS continued:

Liability for breaching the law

Simultaneously, the Federation Council approved the associated law with amendments to Russia’s Code of Administrative Offences, which stipulates liability in the form of penalties of up to 1.5 million rubles (around $23,000) for the spread of untrue and distorting information.

The Code’s new article, “The Abuse of the Freedom of Mass Information,” stipulates liability for disseminating “deliberately untrue publicly significant information” in the media or in the Internet. The penalty will range from 30,000 rubles ($450) to 100,000 rubles ($1,520) for citizens, from 60,000 rubles ($915) to 200,000 rubles ($3,040) for officials and from 200,000 rubles to 500,000 rubles ($7,620) for corporate entities with the possible confiscation of the subject of the administrative offence.

Another element of offence imposes tighter liability for the cases when the publication of false publicly significant information has resulted in the deaths of people, has caused damage to the health or property, prompted the mass violation of public order and security or has caused disruption to the functioning of transport or social infrastructure facilities, communications, energy and industrial facilities and banks. In such instances, the fines will range from 300,000 rubles to 400,000 rubles ($6,090) for citizens, from 600,000 rubles to 900,000 rubles ($13,720) for officials, and from 1 million rubles to 1.5 million rubles for corporate entities.

While this legislation can be spun (and is) in the West as anti-free speech, one may also consider the damage that has taken place in the American government through a relentless attack of fake news from most US news outlets against President Trump. One of the most notable effects of this barrage has been to further degrade and destroy the US’ relationship with the Russian Federation, because even the Helsinki Summit was attacked so badly that the two leaders have not been able to get a second summit together.

While it is certainly a valued right of the American press to be unfettered by Congress, and while it is also certainly vital to criticize improper practices by government officials, the American news agencies have gone far past that, to deliberately dishonest attacks, based in innuendo and everything possible that was formerly only the province of gossip tabloid publications. The effort has been to defame the President, not to give proper or due criticism to his policies, nor credit. It can be properly stated that the American press has abused its freedom of late.

This level of abuse drew a very unusual comment from the US president, who wondered on Twitter about the possibility of creating a state-run media center in the US to counter fake news:

Politically correct for US audiences? No. But an astute point?

Definitely.

Freedom in anything also presumes that those with that freedom respect it, and further, that they respect and apply the principle that slandering people and institutions for one’s own personal, business or political gain is wrong. Implied in the US Constitution’s protection of the press is the notion that the press itself, as the rest of the country, is accountable to a much Higher Authority than the State. But when that Authority is rejected, as so much present evidence suggests, then freedom becomes the freedom to misbehave and to agitate. It appears largely within this context that the Russian law exists, based on the text given.

Further, by hitting dishonest media outlets in their pocketbook, rather than prison sentences, the law appears to be very smart in its message: “Do not lie. If you do, you will suffer where it counts most.”

Considering that news media’s purpose is to make money, this may actually be a very smart piece of legislation.

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