“The dollar isn’t secured by anything,” Igor Panarin said in an interview transcribed by Russian newspaper Izvestia today. “The country’s foreign debt has grown like an avalanche; this is a pyramid, which has to collapse.”(Interestingly, and perhaps too paranoid by half -- the article does not come up via Bloomberg's search facility.)
Panarin is at it again in an interview with Russia today. Some of the good professor's ideas seem spot on, others, well, a wee bit loopy:
In fact, China has about 600 tonnes of gold which, at today's prices, is worth about $75b, not quite enough to shore up AIG. China's reserves rather take the form of IOU's from the coutry Panarin say is about to collapse; ditto for those of Russia. These sober facts shed a different light on the interviewer's preamble to the next question:Q: Will the entire American economy collapse?
A: It is collapsing now. Three out of the five largest and oldest banks on Wall Street ceased to exist because of the financial crisis; and the other two are on the verge of surviving. Their losses are the largest in history. Now we are talking about replacing the regulation system in the world: America will no longer be the world regulator.
Q: Which country will replace it?
A: Two countries are making a claim for this role: China with its large reserves, and Russia as a country which could play the role of a regulator on the Eurasian territory. A rather remarkable event took place at the G20 summit which has just taken place in Washington. Participants put forward the new architectonics of the international affairs where a key role would belong to the International Monetary Fund. But the International Monetary Fund needs funds. Thus the participants addressed China and Japan with a request to provide money. The gold reserves of China come to more than 2 trillion dollars. It is the largest creditor to the USA. Now it will definitely affect the policy of the fund. By the way, it is not accidental that Mr. Hu Jintao met two leaders at the summit: the Russian President and the leader of the UK. There are plans to hold the spring G20 meeting in England. And the meeting with Russia as a country which is putting forward the basic principles of reconstructing the world financial system also clearly fits the vision of the Chinese reformation process.
Q: We are clear about the world leaders [i.e. Russia and China] . But let’s go back to the USA. What makes you believe in the possible division of the country?Expect more of this sort of thing as time goes on.
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