Lusting after Russia's assets.

 ROUND 2 OF FLIGHT FROM WESTERN SYSTEM BEGINS

CONSEQUENCES OUTWAY BENEFITS

This week we watched possibly the beginning of the unraveling of the Eurozone experiment. In 2022 the EU and the United States froze the assets of Russia on deposit in western institutions. It immediately kicked off a reaction of other nations beginning to flee their exposure to dollar and euro investments in favor of Gold and other assets, not at risk to the western financial system. This week the EU attempted to seize those assets in an effort to pay for the continued funding of the Ukraine project.

A lengthy argument was made by Belgium prime minister Bart DeWever that this was a very dangerous idea, not from military risk, but from the destruction of the western financial system, a system that is built on trust, and setting precedents having lasting consequences.

So, $300 billion in assets have been frozen, $145 billion held by Euroclear in Belgium, $50 billion in Japan, who has clearly stated, they are not touching these funds. The other nations who have frozen funds have refused to identify what or how much of these funds they have in their possession, one must wonder why?

Belgium made it clear that they would not be responsible for these $145 billion. So, the EU hoped to spread the liability to all its members. The liability is that there is no law or precedent in international law that allows this seizure. DeWever made it clear that there would be years of  litigation and a high risk of losing in court.

He also believed that credibility of Euroclear, which hold assets from all over the world, would be put in jeopardy and assets would soon be fleeing their jurisdiction.

He also stated that Russia still has access to over $1 Trillion in western assets inside Russia, frozen but not yet confiscated. This week, Russia filed a lawsuit to demand their assets and reparations for their lose of their use and interest. While any such judgment may not be recognized in the EU, they may be recognized in China, or other friendly government to Russia. The EU has been confiscating the interest and bond maturity of these assets for 4 years.

So a vote, which requires unanimous approval, was taken and Belgium. Italy Hungary, Slovakia and the Czech republic voted no. Some suggested that they change the voting rules, another no. This idea was now dead, at least for now.

Then they proposed that they take out a loan by the EU, a loan using future reparations from Russia as colleterial, something unprecedented.  90 billion Euro's or $105 billion in dollars and the liability to be spread out among all members. This is supposed to be given to Ukraine in no interest loans that they believe will allow them to fight for another 2 years.  Most estimate that Ukraine needs $5 billion a month just to keep the government running.

Hungary, Slovakia and the Czech republic refused to vote for this, claiming they had no authority to levy this liability on their taxpayers, an idea that has long become irrelevant in much of the western world. They then exempted these three from contributing to the loans and it passed. It has yet to be reported how these loans will be financed, but seems to be irrelevant. One can assume that most of this money will end up paying for weapons from the EU and the US.

It seems that much of the basis for this continued hope of Ukrainian victory is coming from a unified belief from Ukrainian and western intelligence agencies that Russia will fold before the west. Objective independent analysists are universally dismissing this assumption. After years of false information, weapons of mass destruction, Russia will collapse in weeks, one has to wonder if there is an agenda other than national interest.

The goings on this week in the EU, coupled with the U.S. now seizing a second oil tanker with lawful Panamanian registry and carrying Chinese owned oil and the pursuit of a third vessel which seems to be resisting boarding, we can expect global repercussions possibly starting this week.  Actions have consequences and I doubt if any of these leaders understand where this will end.

The moves to seize Russian assets by the Eu, The Netherlands U.S. prompted seizure of Chinese chip maker, Nexperia and now seizure of vessels on the high seas and attacks on oil vessels in the Mediterranean can only lead to military conflict in the near future.

Today we see that both Gold and Silver have ramped up to record highs as an indication that the flight from western paper assets to metals is accelerating.