Eagle, I don't want to form an alliance anymore.

Now, with the US economy entering its second Great Depression, domestic oil consumption demand in the US has dropped by at least 20 percent, and global oil prices will inevitably fall as a result. However, in this timeline, since oil prices have already rebounded to high levels, the Soviet Union's oil export losses are not significant.

The second thing is the current economic system of the Soviet Union.

This is what truly caused the Soviet Union to completely diverge from the Soviet Union on the other timeline. On that old path, the Western impact was transmitted in a chain reaction:

With fewer petrodollars, the ability to import consumer goods and food decreases, exacerbating domestic shortages. Once fiscal deficits are monetized, they first manifest as hidden inflation, followed by the overt hyperinflation of 1990...

Every link in this chain is firmly tied to the fact that "the Soviet economy was unable to regulate supply and demand domestically."

Koslava had been influencing the Soviet Union’s economic reforms for several years, constantly opposing the radical reformers’ plans to rush into a market economy, and continuously improving domestic consumer goods production, increasing efficiency, and forming an alliance with Gorbachev.

The Soviet Union is now much less dependent on consumer goods than it was in history, and its stable and improving domestic economy even has the capacity to maintain the operation of the old space station when the new Mir space station is launched in March!

The domestic supply of consumer goods in the Soviet Union could now be met through planned resource reallocation between sectors—they could move resources between light and heavy industries, and food was no longer a major problem—if all else failed, there was always Old Zhong.

Although there are fewer imported goods, it won't immediately turn store shelves into empty shelves; at most, the special-supply stores like "Little Birch Tree" will run out of stock.

The alliance's current revenue generation capacity is sufficient to withstand crises. Even if there are gaps, they can buy from Lao Zhong next door. Although the quality of some of Lao Zhong's exported goods may not be as good as those from the West, they are too cheap.

Thus, the crisis that Hayek felt like the sky was falling when he woke up in the West was absorbed layer by layer by the Soviet Union through its buffering mechanism, instead of being amplified one by one as before.

So, while the entire Western world was engulfed in bloodshed, the Soviets were surprised to find that their lines to buy things were no longer than the previous week, and their factories were still operating as usual!

It's like everyone is driving together. Your car is slow, but you've caught up from the back of the line. Then, in the blink of an eye, you realize everyone else is going the wrong way, and you're still driving forward.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

On the evening of the 23rd, Slava did not delay and convened an emergency meeting directly in the Kremlin.

Members of the Supreme Political Bureau and the Central Committee arrived in the morning and gathered in the large conference hall with a portrait of Lenin hanging on it.

Outside the hall, the sun was high in the sky, but inside, there was an uncontrollable restlessness—these people, who had been immersed in the stagnation of Brezhnev's later years for too long, had not tasted what "we have won" felt like for many years.

The meeting was very short, and there was only one topic:

"What can we gain from this unprecedented global transformation?"

Ryzhkov was the first to speak. The prime minister, who knew every single ruble intimately, began to report on the economic impact:

The Soviet Union not only emerged unscathed, but was also thrust into an unexpectedly advantageous position. Oil prices held firm, the planned economy withstood the pressure, and Western capital was now searching the world for a safe haven not directly linked to the US financial system. The Soviet system, which had been operating steadily for several years and repaying its foreign debt on time, was precisely the first respectable destination in the eyes of neutral capital from Switzerland, Austria, and Finland!

This is a scene from the Great Depression of the 1930s, when Western engineers flocked to the Soviet Union during its first Five-Year Plan, and now this scene is about to repeat itself.

So what benefits could the Soviet Union gain from the collapse of the American market after Black Monday's economic crisis?

The most direct benefit was paper profits. The Soviet Union, behind the scenes, used futures trading with 20x leverage to rob a large sum of money from Wall Street. This money had already reached the accounts of various small banks in neutral countries that were indirectly controlled by the Soviet Union.

The most valuable aspect was the strategic space opened up by America's weakness. The Soviet Union might have had the opportunity to return to South America, America's backyard, to give the left a voice again, and to pull swing voters in Western Europe into the Warsaw Pact camp.

After all, for many devout (but not) liberal believers, this global crisis directly shattered their faith, and they desperately needed something new to fill their hearts.

Ryzhkov brought a report from the KGB, stating that since May, the Soviet Union had been gradually building positions through brokers in Liechtenstein, Austria, and Switzerland, mainly in futures, long positions in long-term US Treasury bonds, and Eurodollar interest rate derivatives, supplemented by long positions in gold.

The Soviet Union spent less than 70 billion euros in principal, which was the limit that the Soviet Union could mobilize through its foreign trade banking system; any more and it would have been impossible to hide.

仅仅是从19日到23日这四天多，联盟炒的期货空单这一周跌了约30%,加上年导上的10倍杠杆持有,本金翻了3倍，投入30亿能拿回90亿净利。

对于美债来说，崩盘那周苏联买的30年期美债收益率从10.2%跌到约8.5%,价格涨约15%,5倍杠杆持有投入20亿能拿回12亿净利.

Eurodollar interest rate derivatives have undermined the US's influence in Europe. The main strategy was to bet on a short-term interest rate crash due to panic. During this period, the effective federal funds rate was reduced from 7.5% to 6.7% by the Fed. Coupled with the panic in the interbank market, an investment of 30 billion could yield a net profit of 25 billion.

There was also the support of gold bulls, but the price of gold fluctuated continuously in October 1987, and rose slightly in the week of the crash, so this part basically broke even.

The total book profit entering various accounts is conservatively estimated at $150 billion, and could reach $200 billion with a more aggressive estimate.

The only problem now is that once we get the money, we can't spend it in a short time.

After all, imagine you're robbed and go bankrupt today, and then your poor neighbor next door suddenly buys a Rolls-Royce Phantom, saying it's to thank Marx for opening up new sources. How would you feel?

This money is spread across hundreds of white-glove accounts and dozens of instruments, most of which are derivative positions that need to be closed. The closing itself has to be done in the market after the crash when liquidity is exhausted.

It's important to understand that some of the counterparties were bound to default—because many went bankrupt and were liquidated, turning the money the Soviet Union had earned into bad debt. For example, the already bankrupt Salomon Brothers theoretically owed the Soviet Union $1 billion, but it went bankrupt and was liquidated on October 22nd. The Soviet Union only received $150 million plus the remaining amount due in the bankruptcy court a few years later.

It's basically impossible to get it back, because the Americans will definitely resort to desperate measures and bite indiscriminately. Even a passerby with money in their pocket will check their pockets to see if they have any. What's more, the Soviet Union really did receive a huge subsidy of tens of billions of dollars behind the scenes!

Kids, the $10 billion subsidy from Meiduoduo is real, and it's in US dollars. Kids who want to learn, hurry up and go to the Soviet embassy to register and get a green card!

The Soviet Union now needs to find a way to quickly convert this money into useful industrial products, machine tools, technology, and personnel before the Americans catch it out and bring them home.

After all, the Americans could pressure those small, neutral countries to freeze the Soviet Union's front-line accounts there, but the Americans would never dare to let the US military land on Soviet soil and take back the money the Soviet Union had swallowed!

The last country that could invade Soviet territory, plunder people, money, and industrial goods has now literally split apart.

Therefore, with tight deadlines and heavy workloads, after deducting counterparty defaults, slippage during liquidation, commissions from white-glove brokers, and transfer costs, the actual hard currency that can be pocketed is probably in the range of 100-130 billion US dollars.

About half of this money is held in dozens of bank accounts in Zurich, Vienna, and Tokyo in the form of Swiss francs, marks, and yen; about 30% is held in the form of gold certificates in the London gold market; and about 20% is held in the form of government bonds from West Germany, Switzerland, and Austria.

In any case, the Soviet Union had already sold off billions of dollars and withdrawn beforehand. Dollar assets are neither safe (the US government may freeze suspicious accounts) nor worthwhile (the dollar will depreciate) after the collapse.

Moreover, Slava also knew that the Japanese economy was booming, and the Americans had suffered such a huge loss this time, yet their pigs were still so fat. Since they were short of money, they might as well have a good New Year in advance and bleed Japan dry.

When Japan's economic bubble bursts, a large number of high-quality industrial manufacturing industries will move to Southeast Asia, and the Soviet Union can take this opportunity to make another big profit.

Whether we won or lost ideologically is unknown, but we've certainly gained something.

As for what Japan will do? That's none of Slava's business.

The Politburo then began discussing how to spend the money, how much to spend, and what to buy that would be more valuable.

Whether it's a small win, a medium win, a big win, or just a runaway victory, it all depends on Slava's next move.

The first consensus reached was that there should be no sudden increase in imports of Western consumer goods and food—when the U.S. Treasury and SEC were investigating "who shorted Wall Street," any unusual imports from the Soviet Union would have attracted attention;

Secondly, it cannot be used to repay foreign debt—the Soviet Union's foreign debt was already very low in 1985. That year, in order to cope with the oil crisis, the Soviet Union deliberately incurred billions of dollars in debt. If a large sum were to be repaid suddenly ahead of schedule, Western banks would definitely question the source of the money.

It could not be directly invested in the Soviet Union's domestic economic construction—because this money was in Western currency and gold, and to invest it domestically, it first had to be converted into rubles, and the Soviet Union simply did not have the supply chain capacity to absorb the equivalent of hundreds of billions of dollars in imported goods.

Money should not be kept for too long – Western anti-money laundering investigations will become increasingly in-depth in 1988, and the longer funds remain idle, the more dangerous it becomes.

Considering the urgent need for products in the Soviet Union's current massive economic construction, light industry development, and computer investment campaigns, Ryzhkov first took 80 billion euros from the budget and used it to purchase bottleneck materials for Soviet civilian industry through intermediary trade with member states of the Council for Mutual Economic Assistance (COMECON) and friendly Third World countries.

Advanced CNC machine tools, semiconductor manufacturing equipment, precision instruments, special steels, chemical catalysts, rare pharmaceutical raw materials, advanced computer hardware...

These items were originally subject to COCOM export controls and could not be purchased through normal channels. However, during the Great Depression, exporters in COCOM countries were eager to find buyers, and the enforcement of controls was relaxed. The Soviet Union could expand imports through transit points such as Bulgaria, India, and Finland.

Secondly, it was about increasing gold reserves. In 1987, the Soviet Union's official gold reserves were 2800 tons. By gradually transferring 30 billion in book profits into gold, reserves could increase by thousands of tons, doubling total reserves to over 4500 tons, approaching the level of official US reserves.

This step would take 2-3 years to complete on the international market, disguised as "temporary storage of Soviet gold export revenue" through regular channels in Zurich and London.

However, this step is necessary for the ruble to compete for the dollar's hegemony. With the dollar rising and falling three times, the yen about to collapse, and the mark being targeted by the Americans, using the ruble as the international settlement currency has become a new option.

Then came the budget battle among industrial ministries, with everyone planning to poach talent from crisis-stricken Western companies. The Great Depression of 1987 would plunge many medium-sized industrial companies in Western Europe and Japan into a liquidity crisis—those in the midstream precision manufacturing, specialty chemicals, machine tools, and optics sectors would all be affected.

Who allowed these key industries to go public and participate in the financial chain?

Through the holding structures in Vienna and Zurich, the Soviet Union could quietly acquire or take stakes in dozens of such companies, keeping the ownership percentage below the regulatory disclosure threshold.

This is a precursor to the 90s model where Russian oligarchs held Western assets through Cypriot shell companies, but this time it's state ownership. Ten years from now, these stakes will either provide a continued supply of technology and components or be liquidated at a high price.

Meanwhile, the Great Depression would lead to massive layoffs in American and Western European research institutions and financial institutions. Through the Soviet Union's legitimate institutions in Vienna, Geneva, and Helsinki, laid-off technical personnel—especially those in computer science, applied mathematics, operations research, and control theory—were actively recruited. These were the talents the Soviet Union desperately needed for its computer-based planned economy centered on cybernetics.

The remaining billions of dollars were earmarked for the KGB's overseas operations. Slava specifically instructed Chairman Chebrikov to begin ideological export after the economic crisis had fully impacted the West, to support Western left-wing labor unions, acquire stakes in European media outlets, and foster friendly regimes in the Third World...

Exporting ideology also comes at a cost.

After the budget negotiations were completed, it was the Foreign Minister's turn to hold a debriefing meeting.

Director Nian stood next to Slava, linking his arm with hers, and said:

"We can then intervene more in those socialist brothers in Eastern Europe who have gone astray."

Comrades, think about it: what have those Eastern European countries been relying on to stay afloat all these years? It's Western credit.

But what about now? The West itself has been reduced to ashes in the Great Depression, and credit is not expanding but rather being withdrawn at an alarming rate. For those in Eastern Europe to try to join the West now would be like joining the White Army in 1945.

She paused, her rose-red eyes sweeping across the conference table.

"Our economy is very stable. We can use the ruble transfer credit mechanism within the Council for Mutual Economic Assistance to fill the hole left by the withdrawal of Western capital. In this way, the chaos originally caused by foreign debt is likely to not occur. The entire Warsaw Pact camp can be firmly preserved - this is our biggest geopolitical dividend at present."

In the original history, the debts owed by the reformists of the Eastern Bloc were terrifying.

Poland has a foreign debt of $400 billion, mainly from Western loans taken out in the 1970s during the Gelek era. These loans were used to accelerate development by importing technology and consumer goods, but Poland's debt repayment capacity collapsed in the 1980s.

Hungary has a foreign debt of $200 billion. You should know that Hungary's population is only a little over ten million!

Bulgaria's external debt was about $100 billion, and East Germany's external debt was about 150 billion Western marks. This report was a huge psychological blow to the East German leadership and was one of the internal reasons why they later quickly accepted the unification plan.

Czechoslovakia has an external debt of approximately $80 billion, mainly because the Husak government was extremely conservative and preferred economic stagnation to borrowing foreign debt. As a result, the Velvet Revolution of 1989 inherited a technologically backward but fiscally clean country.

Romania owed 11 billion euros, but the situation was even more extreme. Starting in 1981, General Secretary Nicolae Ceaușescu forcibly tightened his belt to pay off the debt in order to break free from the control of the IMF. By the spring of 1989, he announced that the "foreign debt had been completely paid off." The price was the extreme collapse of people's living standards in the 1980s. Food rationing, power outages, and heating cuts became the norm, which was also the direct source of public anger in the December Revolution.

Of course, these figures represent the foreign debt data up to 1989. At least now the Soviet Union can still provide a safety net, giving the Eastern European bloc some breathing room.

After catching his breath, the big brother is going to give his underlings a good beating!

In terms of ideology, the alliance has enough ammunition to fight for several months.

The director said, "This statement carries the weight of generations! The market fundamentalism advocated by Hayek, Friedman, and their ilk has now been slapped in the face by the Great Depression in front of the whole world."

In the coming years, a group of young scholars will likely emerge in the economics departments of Western universities to seriously study our computerized system, and the social democratic parties in Western Europe may revive the middle path of 'planning plus market'.

Our system is no longer a heresy that the whole world wants to overthrow; it has become an alternative that is seriously put on the table for discussion.

I think Lao Zhong made a very good point: a planned economy is not the same as socialism. Capitalism can also be planned; I think Europe can implement a capitalist planned economy.

The last sentence drew laughter from the audience.

Finally, it was Slava's turn to give a summary.

He stood up and looked around the hall at the faces burning with the heat of victory, and said:

"Comrades, the biggest bonus is that the mountain that America has been pressing down on us is about to collapse!"

"Reagan's logic of seeking peace through strength in the arms race has been broken from this moment on!"

In the next five to eight years, the US Congress will definitely cut its defense spending drastically. I think the Star Wars program will be halted, and the US Navy's plan to build 600 warships will have to be cancelled.

We can simultaneously and proportionally reduce our own military spending—how about reducing that 15 percent military expenditure that weighs on our national economy to 8 percent?

A suppressed gasp filled the meeting room. Marshal Ogarkov, sitting in the corner, trembled slightly in the hand holding his water glass, and the muscles on his battle-hardened face twitched.

“I know the comrades in the army are reluctant to part with him.” Slava glanced at Ogarkov, his tone softening.

"But comrades, you have to do the math—this reduction can save 70 to 90 billion rubles a year from the bottomless pit of military spending."

This money should go to the consumer goods industry, the civilian sector, and our computerized planned economy—this is the lifeblood we've been waiting for in this reform.

Furthermore, we will also introduce computerized planned economy into the military industry system, auditing it separately. This is partly to free up a large amount of high-quality labor currently stockpiled in military enterprises, allowing them to be absorbed by the light industry sector, and partly to improve the quality of the military.

The people in the room were deeply moved by these words.

This is a once-in-a-century opportunity; for the first time in over a decade, the Soviet Union has sided with the victors in the historical narrative.

It was late at night by the time all these matters were finalized, one by one. Slava stood up, stretched his stiff neck, and said to the committee members:

"Alright, comrades, we've finished discussing the important matters!"

"Elbow! Let's go to the banquet hall—it's time to have some fun tonight!"

The portrait of the mentor on the wall gleamed under the light.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

The banquet hall in the Kremlin was brightly lit.

The corks of Soviet champagne bottles popped one after another, and the long table was piled high with caviar, smoked salmon, and freshly baked bread.

These important figures, who usually maintain a stern face and speak with impeccable discretion at Politburo meetings, loosened their collars, blushed, and mingled together in small groups.

Slava, holding a wine glass, walked to the center of the hall and raised it high.

"Comrades! Today is a good day!" he said loudly.

"The assertion that our ancestors read in Capital over a hundred years ago—that capitalism cannot escape its periodic, self-destructive crises—is being proven true today on the other side of the ocean!"

This is yet another victory for invincible Marxism-Leninism, yet another great victory for communist ideology! Let us raise a glass to this victory!

"Hurrah—!"

The cheers from the crowd nearly lifted the Kremlin off its feet.

Slava held up his glass, looking around at the jubilant faces, but his mind was clearer than anyone else's.

He saw it clearly—the same victory presented two completely different images in the eyes of different people.

Ligachev and his conservative followers, raising their glasses, their eyes radiating a certain "I told you so" confidence—in their view, this victory proved just one thing:

There's no need for sweeping reforms; our old methods are sound, and we've won.