The crisis of Credit Suisse, the Western financial system and global geopolitical developments

I believe that few have understood the causes and geopolitical implications of the Credit Suisse collapse. On the other hand, it is not in the interest of Western mainstream information to reveal the nature of the problem since this situation is the direct consequence of a real abuse of power perpetrated against Russia. As is known, in fact, the Russian invasion of Ukraine led to the blocking by the West of Russian movable and real estate assets present on the soil and in the banks of Western countries. This move, without any precedent in the contemporary era, has, de facto , marked the death of every rule in international law regarding foreign assets. Switzerland took part in the “seizure” of Russian assets present on its territory and has effectively frozen Russian movable and real estate assets on its territory. This event meant that the Swiss confederation abandoned its centuries-old neutrality, effectively siding with the West against Russia. However, Bern’s move had very serious implications on the Swiss banking system which seems to have immediately lost credibility in the eyes of many countries that considered Switzerland a safe haven for their capital. This resulted in a massive outflow of capital which led to the well-known liquidity crisis of the Swiss banking giant which collapsed in a few days and was “saved” at the last minute with the controversial acquisition by UBS which sacrificed the interests of shareholders and bondholders (trampling on their rights guaranteed by the contracts signed). All this has profoundly shaken the credibility of the Swiss banking system and has probably laid the foundations for a large flight of capital from the Swiss confederation with inevitable consequences for the growth and development of Switzerland. The problem actually concerns Europe and the entire West which in all likelihood will soon witness an outflow of capital and a return of the same to their countries of origin since Western institutions have demonstrated that they are not credible and knowing how to trample on international law on occasion. This seems to be another piece in the ongoing geopolitical game between East and West and, certainly, it does not play in the latter’s favor.


However, one thing appears clear. The Russian invasion of Ukraine (and the related Western “countermoves”) have led to unexpected developments in every area including that of capital allocation. In particular, the capitals of countries on a possible collision course with Washington (think of India but also of Saudi Arabia which is normalizing its diplomatic relations with Tehran and could therefore enter the sights of the United States of America and Israel) will most likely no longer be located in the West or countries dependent on it. This means that these countries will also give up investing in US government bonds and assets denominated in dollars, creating further mistrust in the world in the role of the US currency as the world’s reserve currency. The economic and geopolitical implications of such developments appear truly impressive. And the seizure of Russian assets in the West could prove to be the most self-defeating move ever made by the West which, in a desperate attempt to break Russia’s back, in fact irremediably damages its own credibility and the support that a large part of the world gives it. had demonstrated. And, above all, it damages the possibility that the rest of the world can continue to finance it. Which independent country will feel like buying dollar-denominated assets that could, on occasion, be seized by Western authorities? And who will buy US and Western public debt in general anymore knowing that Western government bonds could be frozen in the blink of an eye in the event of a diplomatic or commercial clash with Washington and Brussels? Nobody, probably. And this raises serious reflections on the dynamics of public debt in the West which has reached levels never seen in history and which has no chance of being repaid. Will central banks intervene to replace foreign investors or will a large part of this mountain of debt be “dumped” onto unsuspecting small Western investors? In any case, the weight and consequences of a possible default will remain in the West and can no longer be passed on externally. The world is tired of being “taken hostage” by Western finance and debt and wants to pass this “hot potato” onto the West itself which created and fueled such a situation. 


All things considered, the war in Ukraine is irreversibly damaging the prestige and economic power of the West, throwing the administrations of Washington and Brussels into absolute panic. In fact, not only was the military action against Moscow ineffective. But even the imposed economic sanctions did not lead to significant damage to the Russian economy and war machine. Furthermore, the seizure of the Russian assets not only did not have the desired effects but is turning out to be a boomerang with completely unpredictable consequences. What will happen if the non-aligned countries decide en masse to repatriate their capital now “parked” in the Western banking system and in assets denominated in dollars? It would be the end of Western economic dominance. And the end of the economic prosperity of the West. This is the greatest nightmare of Western leaderships. Even bigger than that represented by a (quite probable) military defeat in Ukraine. 


The ongoing conflict in Eastern Europe has given rise to economic and geopolitical developments that the political and economic elite of Western countries have probably not yet fully realized. It has not only given rise to a military confrontation of enormous proportions but is also accelerating the crisis in the West and the passage of world power from the hands of Western countries to those of Eastern countries. And an economic and financial collapse of Washington and Brussels (and all their satellites) is fast approaching. The loss of confidence in the dollar and in the Western financial system are already an expression of this. Capital flight from Swiss and Western banks is the logical consequence of this mistrust. Incidit in foveam qui primus farerat illam. So says a very famous Latin proverb. We just have to wait for the next global geopolitical and economic developments to see if it will really go this way.

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