This blog is part of a network of controversial opinion publisher with many outlets around the web. Here, a blog which has recently become active after languishing in a state of neglect for TEN years because the three main contributors found it easier to attract good traffic elsewhere. One of the themes we have always pursued on all our blogs is the increasingly insecure position of the US dollar as global reserve currency.
So great are the threats to dollar and petrodollar dominance that we have a special Currency Wars Omnibus page which functions as a hub for all our posts on moves led by China, Russia and Iran to replace the US dollar with an international trading currency not controlled by any single nation.
In the latest moves in this non shooting war being waged by the Chinese and Russians (as opposed to the lot of shooting war the USA and its few remaining allies have been trying to start in the middle east, rhe US dominated IMF (International Monetary Fund) is now trying to economically isloate Russia and China. But as Russia and China have already set up infrastructures that will make them independent of the IMF, the move may be too late.
For U.S. geopolitical strategists who for years have been planning for a global economic hegemony backed by US military superiority, a nightmare scenario seems to be developing. Since the escalation of Russia's support for the Assad regime in Syria, senior Pentagon officials have been shocked by Russian advances in military technology and are aware China is possibly further advanced. US Military superiority is an illusion. Foreign economic independence from U.S. control has been exposed as a myth too. Instead of neoliberalizing the world under U.S. centered financial ownership and control, the Russian and Chinese governments have invested in emerging economies worldwide on terms that cement Eurasian economic integration on the basis of Russian oil and gas exports and Chinese financing. US foreign investment has always been exploitative and rapacious, effectively designed to plunder nations foolsh enough to sign trade deals with the USA.
The Asian Infrastructure Investment Bank (AIIB) threatens to replace the IMF and World Bank programs that favor U.S. suppliers, banks and bondholders (with the United States holding unique veto power). Russia's BRICS bank is becoming a rival to The World Bank
from Counter Punch
Russia’s 2013 loan to Ukraine, made at the request of Ukraine’s elected pro-Russian government, demonstrated the benefits of mutual trade and investment relations between the two countries. As Russian finance minister Anton Siluanov points out, Ukraine’s “international reserves were barely enough to cover three months’ imports, and no other creditor was prepared to lend on terms acceptable to Kiev. Yet Russia provided $3 billion of much-needed funding at a 5 per cent interest rate, when Ukraine’s bonds were yielding nearly 12 per cent.”[1]
What especially annoys U.S. financial strategists is that this loan by Russia’s sovereign debt fund was protected by IMF lending practice, which at that time ensured collectability by withholding new credit from countries in default of foreign official debts (or at least, not bargaining in good faith to pay). To cap matters, the bonds are registered under London’s creditor-oriented rules and courts.
On December 3 (one week before the IMF changed its rules so as to hurt Russia), Prime Minister Putin proposed that Russia “and other Eurasian Economic Union countries should kick-off consultations with members of the Shanghai Cooperation Organisation (SCO) and the Association of Southeast Asian Nations (ASEAN) on a possible economic partnership.”[2] Russia also is seeking to build pipelines to Europe through friendly instead of U.S.-backed countries.
Moving to denominate their trade and investment in their own currencies instead of dollars, China and Russia are creating a geopolitical system free from U.S. control. After U.S. officials threatened to derange Russia’s banking linkages by cutting it off from the SWIFT interbank clearing system, China accelerated its creation of the alternative China International Payments System (CIPS), with its own credit card system to protect Eurasian economies from the shrill threats made by U.S. unilateralists.
Russia and China are simply doing what the United States has long done: using trade and credit linkages to cement their geopolitical diplomacy. This tectonic geopolitical shift is a Copernican threat to New Cold War ideology: Instead of the world economy revolving around the United States (the Ptolemaic idea of America as “the indispensible nation”), it may revolve around Eurasia. As long as the global financial papacy remains grounded in Washington at the offices of the IMF and World Bank, such a shift in the center of gravity will be fought with all the power of the American Century (indeed, American Millennium) inquisition.
To U.S. neocons and globalists the threat of AIIB and BRICS bank government-to-government lending and investment raises the spectre of a world independent of the control the USA has exercised as issuer of the de facto world reserve currency.
Though there have always been several currencies apart from the US$ in which international trade is transacted (the UK Pound, Swiss France, the Euro (previously the Deutschmark,) Japanese Yen and Swiss France trade in US dollars was many times greater than the sum of trades in other currencies. In the new system, made possible because the world's financial centers are linked by computer, nations would issue their own money and hold each other’s debt as international reserves instead of borrowing or holding dollars this handing control of their financial planning to the IMF and U.S. which have routinely abused that trust through rigging interest and exchange rates and commodity markets, their demands for monetary bloodletting and austerity for debtor countries. There would be less need for foreign government to finance budget shortfalls by selling off their key public infrastructure privatizing their economies. Instead of dismantling public spending, the AIIB and a broader Eurasian economic union would do what the United States itself practices, and seek self-sufficiency in basic needs such as food, technology, banking, credit creation and monetary policy.
In this U.S. centered worldview, China and Russia loom as the great potential adversaries, power centers independent financially and militarily from the United States. To underline this they created the Shanghai Cooperation Organization as an alternative to NATO, and the AIIB as an alternative to the IMF and World Bank tandem. The very name, Asian Infrastructure Investment Bank, implies that transportation systems and other infrastructure will be financed by governments, not relinquished into private hands to become rent-extracting opportunities financed by U.S. centered bank credit and US domination of the region is thus diminished. With the same happening in Africa and South America and Europe increasingly moving against the global governance ambitions of EU leaders, it looks as if the USA rather than Russia or China will be economically isolated and left with few allies.
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