Dateline: Tiraspol, Transnistria
If you’ve ever visited the Cold War Museum in Berlin, you’ve seen first hand just what life in the former Soviet Union was like.
Flickering electricity, kitchen devices that don’t work, and countless other inefficiencies, along with a 26-horsepower car that I – standing at 6’4″ (1.92m) – couldn’t even fit into.
Of course, if you’d rather not visit Berlin, you could see old Soviet life up close and personal here in the de facto independent Pridnestrovian Moldavian Republic, also known as Transnistria.
During World War II, Nazi Germany passed on an opportunity to carve off the far eastern part of Romania that is modern-day Moldova, leaving the Russians to take over. Later, Moldova would become an independent state despite its close ties to Romania.
Except for a tiny strip of land east of the Dniester River that still felt allegiance to the USSR. These people – citizens of the poorest region of the poorest country in Europe – wanted to go their own way.
That postage-sized strip – slightly smaller than the Cook Islands – is the breakaway state of Transnistria, recognized by no country on earth including Moldova, but which operates as a sort of Russian satellite state.
Few other places on earth still use the hammer and sickle as widely as they do here, just as there are few places on earth in which taking photos of a government building lead to shouts of “net fotografii”, or even time in prison.
As I’ll explain in a moment, their dependence on big government has had big consequences.
Stepping into Tiraspol is like stepping back in time. The city has the feel of something right out of the Soviet era.
Outside than Belarus, few European countries have such Soviet leanings as Transnistria. The breakaway state has been a frozen conflict zone for more than 20 years after an early 1990s ceasefire with the Moldovian government.
The place is largely propped up by the Russian government yet exhibits hallmarks of life in the Soviet Union, such as a mobile phone network that requires such a specialized SIM card that its phones can’t be used anywhere else… even in Moldova’s capital less than 50 miles away.
The Russian connection here goes beyond feelings of goodwill. While the media has made a big deal out of Russia’s dealings with countries like North Korea, little has been said about their involvement in Transnistria.
The reality is, no one in Moldova or even Romania believes this place is real. Heck, not one single country recognizes Transnistria as a sovereign state.
For all intents and purposes, it is part of Moldova. But that doesn’t mean that the Russian government can’t have influence here.
Moldova is somewhat equally split between ethnic Romanians and ethnic Russians, as well as those who identify with each side. Most younger people wish they had never left Romania and are looking to the European Union, the west, and capitalism is supposed to stand for.
Just as many older Romanians long for the days of Nicolae Ceaușescu and the alleged security he brought, older Moldavians long to move toward Russia.
The fact that the Russian government was financing Transnistrian pension plans could be part of it, too.
For years, Mother Russia sent money to this tiny enclave. Up until recently, aid from Russia accounted for 70% of the national budget. Even the ATMs here dispense Russian rubles as the primary currency.
When the US and Saudi governments turned up the heat on Russia for its actions in Ukraine, the ruble plummeted along with Russia’s support for Transnistria.
One contact I made her told me her grandmother lost about two-third of her monthly pension due to Russian woes. Things are so bad that one policy group asked the question, “can Russia afford Transnistria?”
Beyond just income payments, this has had a serious impact on the lives of people here in Tiraspol. Public transportation, for instance, is no longer free. Nor is gas used for heat.
Among younger Transnistrians, public sector salaries were slashed across the board, while prices for necessities like food have been on the rise.
Transnistria is caught in the middle of a scenario we’ve seen so many times in history: people who depend on an imperial government end up broke and starving when that government goes under.
Of course, that government could just as easily be the United States.
For years, the US government has thrown aid around to countries near and far. Plenty of countries have relied on US cash to stay afloat even as the imperialist United States fell deeper and deeper into debt.
To its credit, Russia reacted to its own financial crisis by battening down the hatches and cutting waste. That’s something the United States has yet to do, and it’s only a matter of time before that affects Social Security payments and other retirement programs.
Consider, for example, that the United States has used its military power to dominate the financial world since World War II. The result of that financial imperialism is dictates such as FATCA and telling other countries that they can’t offer economic citizenship programs.
It’s disgusting. But it’s also a house of cards.
US military might was used to convince the Saudis to ensure oil would be priced in US dollars. The promise was that the American military would protect oil fields in return for propping up the petrodollar.
With Barack Obama now getting into bed with Iran, it will be interesting to see how much longer Saudi Arabia will tolerate that arrangement, especially as a growing list of countries have signed onto China’s Asian Infrastructure Investment Bank as the precursor to a new world reserve currency.
For years, the United States has followed the age-old mantra that “he who has the gold makes the rules”. Without a reserve currency, it will be difficult to do that.
And without a reserve currency, it will difficult to support the world’s most imperialistic military to bribe, blackmail, and connive with other countries to do the bidding of the United States.
What does that mean for your retirement? Just ask the people here in Transnistria.
Relying on money from an empire can have disastrous consequences. During the breakup of Yugoslavia, many Serbians – once among the richest and most-traveled in eastern Europe – went broke.
And we all know what happened in the wake of the Weimar Republic, as pensioners used the country’s fiat currency to wipe their tuchus.
With some $100 TRILLION in unfunded liabilities owed by the US government and emerging nations like China, Russia, and Brazil getting tired of American imperialism, the idea that you can rely on Social Security 10, 20, or 30 years from now is ridiculous.
Also ridiculous is the notion that when the government finally realizes it has to ration retirement benefits to those that “really need them”, that they will leave your private retirement account alone.
While Transnistria has a reputation of making life difficult for business owners, you don’t have to come to a Soviet-backed breakaway state to prove my point. You need only look to Ireland or Poland.
I would advise that expats and travelers will be the first to get the short end of the stick when it comes to retirement accounts. Currently, it is possible to collect US Social Security even if you renounce your citizenship so long as you spent the necessary 40 quarters paying into the system. (This is not often the case for other government pension plans, however.)
If you avoid funding an IRA or government-run retirement account, move existing retirement accounts offshore, and invest in safe havens where your money is secure, you can build for your own safe retirement that can be enjoyed from anywhere.
If you’re reading this, chances are you will fall into one of the classes the government fairness police will deem doesn’t need your retirement account, either because you make too much money, have too much wealth, or are too politically incorrect.
Just as Russia easily pulled the plug on its comrades keeping the Soviet vision alive, your government will abandon you when its convenient, too.
US persons already have little in the way of personal savings and are facing similar, albeit less intense, struggles paying their housing, heating, and grocery bills due to factors like inflation.
Once your country no longer sports the world reserve currency, these challenges will intensify, and politicians will be too busy tending to the newly broke constituents to care if stealing your retirement dollars is the wrong thing to do.