Edited by Bronwyn Llewellyn. Jan 29, 2016
- NZ, first to greet the new day
Image caption:
"These are the enemies of everything we hold dear in America (Russia and China). Your children must kill them for us."
This is the meaning I take from this statement: It's not literal. Obama would be stupid beyond stupid if he tried to pick a literal war with China or Russia. I take this to mean that the new infrastructure Russia and China are putting in place (their own internet, their own Swift system, new economic relationships that exclude the USA = FED, IMF, World Bank, Bank of International settlements such as BRICS, SCO and so on...) and those nations who engage in those BRICS-based alternatives, become targets of the U.S. in whatever forms the U.S. decides to implement, eg: trade sanctions, trade agreements, military actions, share market crashes, misinformation in the media, manipulation of election votes, and so on...
“If the Russian side needs it, we will provide necessary assistance within our capacity” - Chinese Foreign Minister Wang Yi, 22 December 2014.
This is a clear testimony that Russia and China have entered into an economic alliance which will be stronger than the incessant ruble and petrol devaluation manipulations by Washington, aided by the European puppets.
China, leading member of the BRICS, is lining up the bloc of the BRICS and that of the Shanghai Cooperation Organization (SCO) and their currencies, to support Russia in need. Currency swaps between the Russian ruble and Chinese yuan for an initial US$25 billion have already been implemented (Dec 29, 2014), to allow direct transactions between the two countries. Similar swaps are under way between China and Russia with other countries, primarily the BRICS and the SCO members. New members to the SCO are Iran, [and-now-tell-me-'compliance'-was-the-reason-why-the-U.S.-lifted-trade-sanctions-on-17-January], Pakistan, India (also a BRICS member) and Mongolia – and possibly in some not too distant future the strategically located NATO member, Turkey.
Trading will no longer be continued in US (petro) dollars, but in rubles and yuans and their partners' respective local currencies. This will reduce worldwide demand for the petro dollar.
The US is able to maintain pressure on other currencies only as long as the petro dollar remains the major world reserve currency. Once the demand for the (petro) dollar fades, the value of the dollar will decline and at worst may result in hyperinflation in economies closely linked to the US economy.
In the meantime Russia has nothing to fear...
Letting the ruble ‘collapse’ is a superb strategy by the Maestro Chess player, Vladimir Putin. Western investors in Russian shares, mainly but not exclusively of hydrocarbon corporations, dropped also. Western investors became afraid and released their shares on the market – Russia’s treasury bought them back at low market prices increasing their value instantly. On top of that, Russia reaped the dividends of the newly Russian owned shares. According to a Spiegel Online article, Russia made at least 20 billion dollars’ worth of profit with this little gambit alone, plus she repatriated about 30% of foreign-held Russian petroleum shares.
Russia has foreign exchange reserves of close to half a trillion dollars equivalent, more than two times the rubles in circulation. Russia’s economy shows a pristine balance sheet with only about 15% debt to GDP, whereas the EU’s debt-GDP ratio is close to 100%.
The petro-dollar is highly dependent on trading hydrocarbons in dollars – following the 40-year old agreement with the Saudis as head of OPEC in turn for US military security and protection. This alone, the constant demand for US dollars by all nations who needed to trade hydrocarbons, propelled the dollar into a ‘permanent’ reserve currency – allowing Washington to print dollars at will and to become a financial hegemony. No longer... Those times are gone. Washington’s evil attempt to destroy all those who ‘are not with us’, catalyzed the transition.
More than a year ago, Russia started selling her hydrocarbons in rubles and started accepting the local currencies of her trading partners, like China and other BRICS countries. Today Russia is selling her hydrocarbon in gold – yes, in physical gold. The west did not count on that, with the quick analytical thinking of President Putin. Russia has been accepting artificially inflated dollars and then immediately exchange them for gold, thereby increasing Russia’s gold reserves dramatically. Today already, the ruble is backed by gold – a reality the west with its casino currencies is very quiet about.
By artificially boosting the value of the dollar against the Euro and lowering the price of gold, the FED and its Wall Street mobsters intended to make the dollar more attractive, especially since Russia and China announced new economic Silk Road, all the way from Frankfurt to Shanghai.
German business is angry about Merkel’s obsessiveness with Washington imposed ‘sanctions’ on Russia. They see Russia as the trading partner of the future. Even the spine and brainless Hollande is responding to France’s business – ‘sanctions’ – enough is enough.
Where does that leave Washington? – One move away from checkmate. Washington’s criminal attempt to destroy Russia’s economy has been largely irrelevant and self-destructive. In the meantime and as Russia’s gold reserves increase, Russia has established an alternative SWIFT system. It is currently being tested internally but could go global within a few months. This means that any country wanting to avoid the corrupt dollar casino scheme could use the new system for international monetary exchanges.
That combined with ever more countries willing and daring to trade their hydrocarbons in their own currencies or currencies other than the dollar, will further lower demand on the petro-dollar. In addition, under their economic alliance, Russia and China may soon launch a new currency, or rather a basket of currencies of other nations ready and willing to abandon the fraudulent western fiat scheme. Immediate candidates would be the other BRICS nations (133 countries affiliated to BRICS in July 2014) and the countries of the SCO.
The combined economic output of the nations behind the joint currency – social indicators such as public health, standard of education and environmental concerns, capacity of conflict resolution, of living in peace and harmony – might be more indicative of the strength of this economic alliance than just gold or a straight GDP.
Such a new monetary system may soon cover 25% to 33% of the world economy, thereby becoming fully autonomous. The petro-dollar would further lose its stature as the world reserve. Ten years ago 90% of world reserves consisted of dollar-nominated securities. Today that ratio has shrunk to 60%, as currencies like the Yuan are rapidly gaining ground as reserve money, especially in Asia. Even Australia has recently declared it will increase its Yuan holding.
The drop of the dollar as the world’s major reserve currency is Washington’s biggest nightmare, and has been for the last 15-20 years when first Iran and then Iraq and Venezuela threatened to sell their hydrocarbon in Euros. These proposed moves were tabled as a means of increasing security for their own economies as worldwide trust in the US dollar was waning then, as it is now.
This is considered one of the major reasons for the 2003 US invasion of Iraq – securing the petro dollar as trading currency. The ensuing war was to take over all of Iraq’s hydrocarbon wells and privatize them.
This was also the key reason for Washington’s false flag accusation of Iran’s plans for manufacturing nuclear weapons [and-now-tell-me-'compliance'-was-the-reason-why-the-U.S.-lifted-trade-sanctions-on-17-January]... In the meantime this has been proven to be a lie, including by the 16 major US intelligent agencies.
Washington’s relentless aggrandizement over Russia is part of PNAC (Plan for a New American Century), to achieve full world hegemony, but at the same time Washington is desperate not to lose its dollar supremacy. The US is in a terminal quagmire. There is no way out. Washington is acting like a wild beast in its last throes of life. The Empire may be capable of destroying the world – including itself – just so that nobody survives outside of the self-appointed Masters of the Universe.
The need for the emergence of a new ‘eastern’ US-dollar-detached monetary system is therefore becoming increasingly urgent. One might ask, why hasn’t it happened before?
It is possible that the new system hasn't been fully launched at this time in a bid to reduce the possible collateral economic damage on the rest of the world. In summary, fair trading among sovereign nations is a noble objective for global peace.
Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He writes regularly for Global Research, ICH, RT, Sputnik News, the Voice of Russia / Ria Novosti, TeleSur, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe.
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