Metronome, The (27 page)

1.         
   Emerging Instruments of Financial Conflict in International Policy
   

Financial power had always been an integral part of national security. But the global nature of the modern financial and monetary systems combined with development of computer and communications technologies and reluctance to unleash the destruction of traditional military options, will raise the importance of financial warfare to a whole new level. Financialization of the U.S. will accelerate this process, as the financial sector will become both more sophisticated and in a greater need of protection and expansion in order to ensure its self-preservation.

We have already seen examples of such operations, but so far they have been isolated incidents. One instance was application of sanctions to Serbia in 1993: the U.S. had identified and seized the assets of the Serbian leadership, impeding the regime’s ability to resist the NATO attacks. Another instance was the use of financial sanctions against individuals and companies that the United States believed to be involved in the Colombian narcotics trade. The United States evolved a special office of the U.S. Treasury Department called the Office of Foreign Assets Control designed to conduct such financial operations. While this organization existed in different forms and under different names since World War II, the true potential of this type of warfare is only now being realized.

We should expect that development of the tools of financial conflict will continue and that these tools will leverage the strengths and advantages of the U.S. financial complex:
 

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The U.S. dollar’s status as the world’s reserve currency. The majority of world trade is conducted in dollars. The dollar makes up almost two-thirds of foreign reserves in other countries. The American ability to print, at will, the most accepted currency of the world gives it tremendous advantage in financial affairs
 

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Global importance of the U.S. banking system and capital markets. It is difficult for a country, or even for a large company, to function in financial isolation. The United States can – and will – exploit this to punish those that are not complying with American policies. After all, it’s not necessary to target the offenders directly. It is much more effective to threaten to punish anyone who may work with the offender in any capacity. The mere threat of such action will likely be sufficient to isolate anyone the United States wishes to.
 

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Access to and control of banking data. It’s a fallacy to assume that because most of the banking institutions and telecommunication networks are not controlled by the United States, the private deposits and transaction information will remain private. As described above, the U.S. financial complex has developed a tremendous leverage not only over the U.S. policies, but also over non-U.S. entities. We should expect that information about any transaction, any bank-to-bank transfer via standard banking mechanisms, such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT), will become available to the United States.
 

In short, the financialization of the United States, while weakening many aspects of the economy and societal cohesion, is also providing the United States with powerful tools for using the financial system in its national interests. In the process, we can expect that the United States will develop the surveillance capabilities over both foreign and domestic entities and individuals that the security services of the past could only dream of.

I shrug this off. There were some publicized financial actions against North Korea and money laundering in Eastern Europe, but otherwise I see no evidence that Voronezhsky’s thought experiment ended up being correct.

Flight attendants are back with a so-called dinner, I take a break with some form of lasagna and a refill on my scotch.

1.         
   Implications for the Russian National Security
   

As we explained in previous sections, we expect the United States to develop increasingly sophisticated surveillance and financial warfare tools and employ them in its international policy. In the ongoing debate within the Russian government, some argue that this is not to be concerned with since the United States in the 20
th
century has been largely a benevolent power. The U.S. post-World War II behavior towards vanquished Germany and Japan is given as an examples of this benevolence. In our view, such an argument is missing the point. U.S. behavior will be driven by U.S. interests, and any benevolence will be shown only to the extent of such interests. But even more important is the simple maxim that’s been shown true throughout history and that Russia is well familiar with: “Power corrupts.” When presented with the opportunities that such financial power makes possible, it is inevitable that at some point – and probably sooner rather than later – policy decisions will be made to the advantage of the American ruling elite rather than worldwide well-being. It is not in the Russian national interests to be dependent on the American goodwill. Moreover, the very unsustainability of the financialized model that the United States is embarking on makes such dependency especially dangerous.

Another argument being made is that with the United States being strong and Russia, at least at this time, weak, there are no real policy alternatives. While acknowledging the pragmatic point of Russia’s relative weakness, we must disagree with the conclusion. There is no possibility – or even desirability – of directly confronting the United States in the near future, but many wars have been won by patience and guerilla tactics. The very course that the United States is undertaking ensures that its weaknesses, and our opportunities, will increase over time.

What are the present and likely-to-emerge U.S. weaknesses that we should seek to exploit? This list provides a suggested roadmap for how Russia can protect its national security and resist U.S. dominance in this ‘financialized’ environment:
 

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Nurture alliances with like-minded nations. The nature and application of the U.S. power will likely lead to “if you are not with us, you are against us” attitude that the Russian people are, unfortunately, so well familiar with. Unilateral actions and/or actions done with support of only a handful of allies will force other nations to choose sides. Countries such as China, India, Brazil, Iran represent possible targets. Brzezinski identified a possibility of such an alliance, but discounted its likelihood due to diverging interests. We believe he underestimated the unifying factor of resisting American hegemony.
 

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Work to end the “reserve currency” status of the U.S. dollar. The United States will be increasingly forced to grow through the rise of indebtedness rather than true wealth creation through production. The government will be forced to operate in persistent deficit in order to support the ever-larger proportion of the poor. There is no constructive outcome to this state but the effective devaluation of the currency. This will undermine the ‘reserve currency’ status of the U.S. dollar, key pillar of the U.S. financial power. Russia can help to accelerate the process by working with like-minded nations to eliminate the dollar from bilateral or multi-lateral transactions
 

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Avoid the oversight of the U.S. financial system. One avenue is to work with allied countries to construct parallel financial networks, e.g., alternatives to SWIFT, a separate credit card system, etc. The other avenue is to deeply embed some of our financial resources into the Western system, so these resources are not perceived as “potentially hostile.” While both approaches can and should be pursued, the “deep embed” has an additional advantage of being secret. As increasing indebtedness makes the U.S. system more leveraged and less stable, where even a limited but unexpected and well-placed action can cause a wide-spread crisis.
 

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Promote internal divisions. Rising inequality will undermine societal cohesion of the United States. History shows that most of the societal collapses and bloody revolutions have been preceded by extreme inequality. The American people may not appreciate this point because the American Revolution, unlike the French or the Russian ones, was not driven by inequality. The United States has been protected by the majority of its population belonging to the middle class that traditionally provided societal stability. As “financialization” decimates this group, its stabilizing influence will dissipate and the divides between various groups and states within the United States will increase.
 

The steps described here are largely clandestine, requiring time and patience. Over time, all political systems deteriorate because organized interest groups extract ever increasing value for themselves. Our strategy should be based on United States continuing down an unsustainable path and eventually wearing itself out via societal divisions and imperial overstretch. All American strategic thinking is based on an invulnerable “fortress America.” But while it’s not vulnerable militarily, it is vulnerable economically. We think that the key element is displacement of the U.S. dollar as the reserve currency. It is impossible for us to predict exactly when such a point will be reached. Based on the likely trajectory of the rising debt, aging of the U.S. population and corresponding increase in the U.S. government’s social and medical expenditures, and faster growth of other countries, we would project this to be twenty to thirty years in the future.

After finishing Voronezhsky’s document, I re-do my diagram. This time I start with two large, partially overlapping circles. One circle I title “Brockton’s scheme.” I place Crossmans, Khmarko, and Voronezhsky Sr. inside the circle, Brockton into the overlap part. The second circle I call “Deep embed?” and put Nemzhov and Sosnovsky inside the circle and Streltsova into the overlap part. Below the circles, I write names – Vakunin, Pemin, Saratov, Voron(ezhsky), Shoffman. And then I draw just one more circle, with Karen and Sam Baker. This diagram is much simpler now, the picture in my head almost complete.

When I land, my first instinct is to call Sarah. I pull out my phone as I walk through the terminal, stop, stare at it for a minute and call Jack instead. We arrange to meet for lunch on Monday.

When I get to my apartment, I unpack, set up the father’s metronome. It fills the place with a steady
click, click, click…
The fridge is empty, and I go to a neighborhood grocery to pick up some food. There, while standing in front of Fuji apples, I give up and call.

She answers on a third ring. “Pavel?” There is noise of many people in the background.

“Yes, it’s me.”

“Where are you?”

“In a grocery store.”

“In St. Petersburg?”

“No, here in New York. I just got back.”

“Are you OK?”

“Yes, I am fine. Are you?”

“I am good. Look, I have to go, OK?”

“OK.”

What did you expect?
She has to live her life. I wanted Anya for her pleasant comfort and familiarity. I wanted Karen for that instant recognition in the Lenin’s Library, the recognition that changed everything. Why do I want Sarah? It’s not familiar or spiritual. I think it’s the greed. The greed of wanting to possess her, to merge into one whole. It’s the physical, hungry relationship. The best thing I can do for her is let her go.

Back in the apartment, I eat without noticing what, just to keep myself going. Find a bottle of Chivas Regal, pour myself a glass. I stand by an open window, listening to the sounds of New York, thinking of taking a walk to the river when the intercom rings. It’s Sarah.

I planned to ask her about her week, explain what happened to me. Instead, when she comes through the door I push her against the wall and pull up her dress. Her mouth latches onto mine, her left arm pressing me into her face while her right hand desperately tries to unzip me. “Yes, Yes,” she sobs as I enter her against the wall, her breaths coming out in short cries. I don’t know how we ended up on the floor. I gasp and Sarah pulls me into her as hard as she can. After we climax, we lie there, breathing hard. She is dressed for going out, a sparkly little emerald green affair with a string of pearls and matching high heels. Satin red underwear is lying by the wall.

Sarah lightly runs her hand through my hair, starts crying quietly. “Did you put some potion in my drink when we went together for the first time? I was on a date with a perfectly nice guy today, and then you called and all I could think about was how to leave without hurting his feelings.”

I cradle her in my arms, rocking gently. “Sarah, I am so sorry. I tried not calling. But to be in the same city and not call you…I could not, I am sorry. We can go out, get dinner.”

She gets up, lifts the dress over her head, standing there in shoes and a bra.

“No, not tonight. I want to stay here. But tomorrow is Sunday; promise you’ll spend a day with me.”

I promise.

Later in bed she says, “I feel like a character in one of those depressing Russian dramas from the 19
th
century, caught in a hopeless affair. Reading those back in college, I could not understand this kind of attraction to tragedy, to hopelessness, to pain. I think I do now.”