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March 12, 2001

 we support the freedom of word in THE USA " [On March 7, 2001 I was asked by the Chairman of the International Financial Congress, Igor Tolstoshein, to make a 10 minute presentation to an assemblage of approximately 40 of Russia's top economic and financial experts. Also included in the group were experts from Germany and the Maylasian Ambassador to Russia, His Excellency Datuk Yahya Baba. I had traveled to the Congress at the Bor Presidential Hotel and Retreat not planning on speaking and had not prepared a written statement in advance. My presentation therefore was not made from a written text but rather from some hastily assembled notes.

There were only individual translators available that day and I did not tape record my remarks. The following is the most faithful recreation of my statement that I can make relying upon the original notes I made just before speaking.

A full report on the Congress and my evaluations of the current Russian situation will appear in the March 31 issue of my newsletter From The Wilderness. That newsletter is available to paid subscribers only and may be subscribed to through our web site at  I am happy however, to share this freely with so many of my newfound Russian colleagues and concerned fellow residents of this very troubled planet. I thank all of the Russians I met on this trip for their wonderful hospitality, courtesy and genuine concern in these perilous times. - MCR]

Thank you and good afternoon. I would like to thank the Chairman for this opportunity to speak to this august group and begin by saying that I am not an economist or a financial expert but rather a former police investigator turned journalist. My newsletter, From The Wilderness is now read in 16 countries and by 15 members of the U.S. Congress as well as the intelligence committees of both Houses of the US Congress. We are also read by professors at 11 universities in the US, Canada and Great Britain. We have a free research web site at

It is an honor to be in Russia as my mother was, as a cryptographer, connected with operations of the US Secretary of State Cordell Hull who visited Moscow in October 1943 to discuss matters regarding the war against Nazi Germany.

I have spoken out for more than twenty years about the CIA's involvement in the international drug trade. While in Russia I have listened closely now to outstanding presentations by many experts and if I have anything significant to add to this discussion it is to agree clearly with other opinions I have heard expressed that the study of economics and international finance, if it is to be effective, must be connected to political and social undercurrents. A mere study of numbers and graphs often leads to erroneous conclusions because it does not take into account the unseen events which truly guide and determine the economic symptoms which are then measured by numbers.

This congress has focused on what many here believe is the imminent collapse of the U.S. dollar. I do not agree with this concept and I have heard others here express the same sentiment. While I do not think that the collapse of the US dollar is imminent I absolutely do believe that the collapse of the US stock markets is. Too many countries around the world rely upon the US dollar as a reserve currency. This fact alone, I believe, would prevent the dollar's collapse. However, as all of the experts here have so clearly pointed out, the US economy is in serious trouble and I believe that the US stock market is in immediate peril.

In order to understand this it is essential to study the role of money laundering in international finance. As much as $200 billion US has been looted out of Russia in the last ten years and much of it laundered through US financial institutions like the Bank of New York. I wrote about this in the fall of 1999. But to place this in context it is necessary to note that in 1994 the UN estimated that $440 billion a year in illegal drug money was moved through the world's banking system. Just 18 months ago "Le Monde Diplomatique" estimated the annual drug flow at $500 billion with the total annual proceeds of criminal activity amounting to $1 trillion US. And just two weeks before I came here the "San Francisco Chronicle" cited the International Monetary Fund as stating that the amount of criminal money moving through the world economy is $1.5 trillion US each year.

Criminal activity and money laundering has become the world's largest free enterprise and it is also determining political, economic and military action around the globe. $1.5 trillion is larger than every national GNP except for the five largest industrial economies in the world. Now I have heard the experts here cite truly astounding figures like the $30 trillion in derivatives in the US market and the overall values of the world economy. To compare $1.5 trillion and state that this amount is not the most important component of success or failure is to miss the point entirely.

If two race cars are capable of doing 240 mph the race will be A tie. No one will win. The world economy is a fierce competition for capital, liquidity, markets and, perhaps most importantly, currency. Therefore the race car capable of doing 241 mph is the one that will win the race. That $1.5 trillion a year of highly liquid, low cost, unrestricted capital is what is determining the results in the present day world economy. This is because, as noted by former US Assistant Secretary of Housing Catherine Austin Fitts, "Those with the lowest cost of capital win." Winning, however, comes with a heavy price. I have confirmed that even now the US government works directly with some of the biggest drug dealers in history.

I wholeheartedly agree with Russia's brilliant economist Michael Khazin and others who state that the US engages in serious long term planning and manipulation of world events. As an example I will cite the fact that in June of 1999 the Chairman of the New York Stock Exchange, Richard Grasso, traveled to Colombia and met with leaders of the FARC guerillas who control a third of that country and who have acquired billions of dollars from taxation of the drug trade. Grasso's request was that the FARC rebels invest their drug profits in Wall Street. This was necessary in order to continue pumping cash into the already precarious investment bubble in America that had also been partially sustained by the systematic looting of Russia from 1993 to 1999.

The FARC guerillas refused to give Wall Street their money.

A year and half later the United States is implementing another Vietnam conflict which is just now commencing and which is an absolute necessity to prevent a total collapse of the US economy. That conflict will not only suck capital out of Colombia it will open up oil rich lands in rebel territories to US drilling and it will create thousands of displaced persons who will become low cost labor for multi-national corporations seeking to build factories in South America.

 As the Euro seeks to establish itself as an alternate currency to the US dollar - a healthy competition that I believe would diversify and strengthen the world's economy - you here in Europe should take note of leaders like Venezuela's Hugo Chavez who has opposed America's "Plan Colombia." Just recently the European Union voted unanimously, with one abstention, to oppose this new Vietnam War. If South America is to resist this war it will need strong economic support to pull away from US domination and the influence of the Central Intelligence Agency.

This brings to light what I consider to be an emerging determinant of economic and political realties in this era of globalization - geography. I have noticed that in recent years the drug trade is following businesslike principles that tend to reduce transportation and distribution costs. The American drug market is now predominantly supplied by cocaine and heroin from South America. Europe and Russia have been increasingly supplied by heroin from the Golden Crescent in Afghanistan and Pakistan. And the Asian drug market is receiving most of its supplies from Southeast Asia. We are seeing less and less large scale smuggling over long routes and a trend toward efficient and more cost-effective management of the trade that produces liquid, hard currency.

Just before coming to this conference I read in the Associated Press, Agence France Press and other reliable sources that the Taliban has recently eradicated most of its 3,000 ton opium crop in Afghanistan. If true, I view this as a form of economic warfare against Russia because it would drive opium production more into Southeast Asia and Colombia. However, I now suspect that this will result in a shift of opium production to the Caucasus under the Kurds which will see an increase in smuggling through Armenia, Georgia, and Azerbaijan. I should note that both the American Vice President Richard Cheney and the designated Deputy Secretary of State Richard Armitage are members of the US-Azerbaijan Chamber of Commerce. Such a move would have the effect of drastically shortening smuggling routes and costs into Western Europe and bypassing unstable areas of the Balkans.

I have received additional reports that Uzbekistan is now awash in the opium poppy and, as in the US with the CIA, that Russian military and intelligence agencies facilitate the trade as a means of protecting access to hard currency. The point here is not that the US it totally evil or the only country doing these things. But the US is far and away the most advanced nation when it comes to the use of such methods to achieve superiority.  As Khazin has noted the US and Britain and Germany started the conflict in Kosovo in 1999 to stave off a collapse of western markets following the Asian collapse of 1997-8. Now Colombia is a last-ditch effort to protect the US markets and European opposition is jeopardizing that plan.

This is one of the reasons that I believe that as long as European countries play in a game created by and controlled by the US, and in which the US holds back critical information and unseen trump cards, the results will always be the same. That is one reason why I totally favor decriminalizing drug use throughout the world.

I am not anti-American, I love my country. But I see it succumbing to the same level of criminality that now eats at the rest of the world. We have talked about the looting of Russia but that same looting has begun in the US. Last year $59 billion US was looted from the Department of Housing and Urban Development. That money disappeared into US markets and into offshore havens. Perhaps trillions more is missing from the US Department of Defense. We looted our Savings and Loan Institutions in the 1980s and we now stand poised to loot our Social Security System.

It has become a "search and destroy" world economy in a climate of increasing economic disparity and this can only lead to apocalyptic results. A snake eating its own tail is not nutritious. That is why I believe that a healthy Euro, using different strategies for wealth creation, can bring some sanity back into the picture. For in the current modality the only inevitable course is for world governments to seek to "out-crook" each other in competition for the cheap capital afforded by criminal activity. This can only end in war.

As an example of the highest form of criminal activity imaginable I would ask you to look at the depleted uranium scandal in Europe. This was not a matter of US imperialism or recklessness. This was a matter of corporations that produce nuclear waste seeking to boost their stock values by increasing net profits. As a result they sold a product they knew to be contaminated with transuranics and  plutonium and U-235 to the nations of Europe without telling them and, as a result, portions of Kosovo will be radioactive - forever. This does not address the horrible carnage in Iraq, many times greater than Kosovo, where thousands of children are dying of birth defects and leukemia and the southeastern portion of that country will also be uninhabitable virtually forever.

The first thing that our Chairman, Igor Tolstoshein, said to me when he picked me up at the airport was, "Why is President Bush uniting all of Europe?" His observation was most perceptive. As a matter of defensive reaction to increasing economic exploitation, Europe is indeed uniting in unimagined ways as Germany invests in Russia and Russia enters into agreements with Germany and France for upgrades of the MiG 29. Indeed, I again strongly concur with Michael Khazin that the WTO and globalization will fail as the world retreats into three dominant economic spheres of activity: The Western Hemisphere, Europe, and Asia.

What is most telling here is a recent quote by U.S. Senator John McCain as the United States strenuously opposed the creation of a European Union Rapid Deployment Force. In discussing NATO he said, "The issues that confront us go to the very core of our existence as an alliance. Fundamental questions regarding the future of NATO stand before us. I am afraid that our geographical divide is increasingly becoming a functional one. Our perspectives are diverging."

In order to respond to this crisis what is essential is that the world find new ways of creating wealth that are beneficial rather than destructive. I refer this Congress to the web site of former U.S. Assistant Secretary of Housing and former managing Director of the Wall Street investment bank Dillon Read, Catherine Austin Fitts. She is a true innovator in alternative means of wealth creation and she has been my greatest tutor on matters of economics and fiscal policy. Her web site is at I regret that she was not at this Congress. But she is very accessible and eager to help create a safer, healthier and more profitable world. She has a profound understanding of American political economics and a wealth of information to offer those seeking creative solutions.

I would like to thank the Chairman for this opportunity to address this body and conclude by saying that I am an optimist and I believe that the world will survive these impending challenges even though I am afraid that there will be some serious dislocations before the crisis passes.

Michael C. Ruppert Publisher/Editor "From The Wilderness"


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