March 2015: Major Realignment of the World’s Banks
The US dollar has been the worlds controlling currency for a very long time. In times of financial constraint, eg the 2007-8 crisis the US Federal Bank simply printed more dollars and this has resulted in a glut of paper money which cannot be supported by gold reserves. Many countries are uneasy at this state of affairs and in 2013 a group of five comprising Brazil, Russia, India, China and South Africa (BRICS) decided to form an anti-dollar alliance breaking away from the, International Monetary Fund, The World bank and over time the US dollar.
The fear in the US is the loss of power that would be brought about through a transfer of control of the worlds finance to Russia and China. Meeting the challenge was considered crucial and the US tasked the NSA, CIA, FBI and other covert agencies to monitor events so that they would be placed to ensure the group did not expand further.
The full extent of the covert eavesdropping operations were revealed to the world by the US National Security Agency (NSA) leaker Edward Snowden and former CIA agent John Kiriakou and resulted in many countries curtailing diplomatic relations with the US. The clumsy attempt to retain the status quo accelerated the growth of the newly formed BRICS group. http://rt.com/usa/kiriakou-snowden-letter-leak-618/
BRICS are an innovative team and spawned a Development Bank promoting growth within the group. Many new countries have committed to the new bank including the UK, Germany, France and Italy. It follows that relations between the US and europe are strained and the full effects of the new alignment will be far reaching. There is talk of the US reverting to the inward looking status it pursued, up to 1942. For those inclined to know more I have tabled below a sequence of events, to date. Enjoy the ride.
The National Security Agency monitored the phone conversations of 35 world leaders after being given the numbers by an official in another US government department, according to a classified document provided by whistleblower Edward Snowden.
The confidential memo reveals that the NSA encourages senior officials in its “customer” departments, such the White House, State and the Pentagon, to share their “Rolodexes” so the agency can add the phone numbers of leading foreign politicians to their surveillance systems. The document notes that one unnamed US official handed over 200 numbers, including those of the 35 world leaders, none of whom is named. These were immediately “tasked” for monitoring by the NSA. The revelation is set to add to mounting diplomatic tensions between the US and its allies, after the German chancellor Angela Merkel on Wednesday accused the US of tapping her mobile phone.
Merkel suspected the surveillance after finding her mobile phone number written on a US document, is said to have called for US surveillance to be placed on a new legal footing during a phone call to President Obama. “The [German] federal government, as a close ally and partner of the US, expects in the future a clear contractual basis for the activity of the services and their co-operation,” she told the president.
Earlier in the week, Obama called the French president François Hollande in response to reports in Le Monde that the NSA accessed more than 70m phone records of French citizens in a single 30-day period, while earlier reports in Der Spiegel uncovered NSA activity against the offices and communications of senior officials of the European Union.
The European Commission, the executive body of the EU, this week backed proposals that could require US tech companies to seek permission before handing over EU citizens’ data to US intelligence agencies, while the European parliament voted in favour of suspending a transatlantic bank data sharing agreement after Der Spiegel revealed the agency was monitoring the international bank transfer system “Swift”.
October 2013: BRICS Countries Build New Internet to Avoid NSA Spying
BRICS countries are close to completing a brand new Internet backbone that will bypass the United States entirely and thereby protect both governments and citizens from NSA spying. In light of revelations that the National Security Agency hacked German Chancellor Angela Merkel’s phone, in addition to recording information about 124 billion phone calls during a 30-day period earlier this year, the fallout against the NSA has accelerated.
A 34,000-kilometre undersea fiber-optic cable will be in place by 2015 running from Vladivostok, Russia to Fortaleza, Brazil, via Shantou, China, Chennai, India and Cape Town, South Africa. The project will create, “a network free of US eavesdropping,” which via legislative mandates will also force the likes of Google, Facebook and Yahoo to store all data generated by BRICS nations locally, shielding it from NSA snooping.
July 2014: BRICS morphing into anti-dollar alliance
the Governor of the Russian Central Bank used a meeting with the Peoples Bank of China to let the world know about the technical details of its international anti-dollar alliance. She outlined the need to establish an international alliance of countries willing to get rid of the dollar in international trade refraining from using dollars in their currency reserves. The ultimate goal being to break Washington’s money printing machine that is feeding its military-industrial complex and giving the US ample possibilities to spread chaos across the world.
Currency swaps between the BRICS central banks will facilitate trade financing while completely bypassing the dollar. At the same time, the new system will also act as a de facto replacement of the IMF, because it will allow the members of the alliance to direct resources to finance the weaker countries. As an important bonus, derived from this “quasi-IMF” system, the BRICS will use a part (most likely the “dollar part”) of their currency reserves to support it, thus drastically reducing the amount of dollar-based instruments bought by some of the biggest foreign creditors of the US.
Commenting, Andrei Kostin, the president of the state-owned VTB bank and one of the staunchest supporters of anti-dollar policies, offered an interesting perspective on the situation in Europe: “I think the work on ruble-yuan swap line will finalized in the nearest future and the way for ruble-yuan settlement will be open. If the current trend continues, soon the dollar will be abandoned by most of the significant global economies and it will be kicked out of the global trade finance. Washington’s bullying will make even former American allies chose the anti-dollar alliance instead of the existing dollar-based monetary system. The point of no return for the dollar may be much closer than it is generally thought. In fact, the greenback may have already past its point of no return on its way to irrelevance. Read more: http://sputniknews.com/voiceofrussia/2014_07_03/BRICS-is-morphing-into-an-anti-dollar-alliance-6229/
The Brazilian President, meeting with President Putin a day before leaders of the five emerging BRICS nations meet, told reporters the bank would top the summit’s agenda, adding she hoped the event would produce an agreement on the proposed institution. She said the five countries “are among the largest in the world and cannot content themselves in the middle of the 21st century with any kind of dependency.” Brazil and Russia also signed bilateral accords on air defense, gas and education.
July 2014: Anti-Dollar Alliance Prepares Launch Of BRICS Bank
There has been a growing anti-dollar hegemony alliance across the BRICS countries (Brazil, Russia, India, China and South Africa). Their efforts concentrating on creating a structure to serve as an alternative to the IMF and the World Bank (which are dominated by the U.S. and the EU). Brazil’s President Dilma Rousseff and Russia’s Vladimir Putin have discussed the creation of a development bank to promote growth across the BRICS and hope to produce an agreement on the proposed institution at this week’s BRICS Summit.
July 2014: BRICS Announce $100 Billion Reserve To Bypass the US Federal and Developed World Central Banks
The BRICS anti-dollar alliance has successfully created a so-called “mini-IMF” The world’s developing nations stated “We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness.”
President Putin explained, this is part of “a system of measures that will help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies.”
Initial capital for the BRICS Bank will be $50 Billion – paid in equal share among the 5 members (with a contingent reserve up to $100 Billion) and will see India as the first President. The BRICS Bank will be based in Shanghai and chaired by Russia. Simply put, it’s game over for the dollar.
The creation of the BRICS Development Bank has a political significance too, since it allows its member states to promote their interests abroad. “It is a political move that can highlight the strengthening positions of countries whose opinion is frequently ignored by their developed American and European colleagues. The stronger this union and its positions on the world arena are, the easier it will be for its members to protect their own interests.”
Perhaps the following sums it all up perfectly. Economists warn the IMF’s legitimacy is at stake, and they say U.S. standing abroad is being eroded. “Eroded” indeed…if the current trend continues, soon the dollar will be abandoned by most of the significant global economies and it will be kicked out of the global trade finance. Washington’s bullying will make even former American allies choose the anti-dollar alliance instead of the existing dollar-based monetary system. The point of no return for the dollar may be much closer than it is generally thought. In fact, the greenback may have already past its point of no return on its way to irrelevance.
Key excerpts from the Full statement:
We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness. The IMF reform process is based on high-level commitments, which already strengthened the Fund’s resources and must also lead to the modernization of its governance structure so as to better reflect the increasing weight of EMDCs in the world economy.
The Fund must remain a quota-based institution. We call on the membership of the IMF to find ways to implement the 14th General Review of Quotas without further delay. We reiterate our call on the IMF to develop options to move ahead with its reform process, with a view to ensuring increased voice and representation of EMDCs, in case the 2010 reforms are not entered into force by the end of the year. We also call on the membership of the IMF to reach a final agreement on a new quota formula together with the 15th General Review of Quotas so as not to further jeopardize the postponed deadline of January 2015.
BRICS, as well as other EMDCs, continue to face significant financing constraints to address infrastructure gaps and sustainable development needs. With this in mind, we are pleased to announce the signing of the Agreement establishing the New Development Bank (NDB), with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies. We appreciate the work undertaken by our Finance Ministers. Based on sound banking principles, the NDB will strengthen the cooperation among our countries and will supplement the efforts of multilateral and regional financial institutions for global development, thus contributing to our collective commitments for achieving the goal of strong, sustainable and balanced growth.
The Bank shall have an initial authorized capital of US$ 100 billion. The initial subscribed capital shall be of US$ 50 billion, equally shared among founding members. The first chair of the Board of Governors shall be from Russia. The first chair of the Board of Directors shall be from Brazil. The first President of the Bank shall be from India. The headquarters of the Bank shall be located in Shanghai. The New Development Bank Africa Regional Center shall be established in South Africa concurrently with the headquarters. We direct our Finance Ministers to work out the modalities for its operationalization.
We are pleased to announce the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$ 100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements. We appreciate the work undertaken by our Finance Ministers and Central Bank Governors. The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures.
July 2014: Germany Secretly Planning to Join BRICS
NSA surveillance controversy centered on U.S. fear that Europe’s economic powerhouse will dump the dollar. Jim Willie, a statistical analyst who holds a PhD in statistics sensationally claimed that Germany is preparing to ditch the unipolar system backed by NATO and the U.S. in favor of joining the BRICS nations, and that this is why the NSA was caught spying on Angela Merkel and other EU leaders. “I think they were looking for details of a secret movement for Germany to get away from the dollar and join the BRICS (Brazil, Russia, India, China and South Africa.) This is exactly what I think they are going to do,” said Willie.
Earlier this month, the BRICS nations (Brazil, Russia, India, China and South Africa), announced the creation of a new $100 billion dollar anti-dollar alternative IMF bank to be based in Shanghai and chaired by Moscow. Putin launched the new system by saying it was designed to, “help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies,” a clear signal that Russia and other BRICS countries are moving to create a new economic system which is adversarial to the IMF and the World Bank.
In another sign that BRICS nations are moving to create an entirely new multi-polar model adversarial to the west, the five countries are also constructing an alternative Internet backbone which will circumvent the United States in order to avoid NSA spying.
Willie also links Germany’s move to last week’s shoot down of Malaysia Airlines Flight 17, which has been exploited by the U.S. and Britain to push for more stringent sanctions on Russia despite the fact that they have had little effect so far and only appear to be harming the trade interests of countries in mainland Europe.
“Here’s the big, big consequence. The U.S. is basically telling Europe you have two choices here. Join us with the war against Russia. Join us with the sanctions against Russia. Join us in constant war and conflicts, isolation and destruction to your economy and denial of your energy supply and removal of contracts. Join us with this war and sanctions because we’d really like you to keep the dollar regime going. They are going to say were tired of the dollar. . . . We are pushing Germany. Don’t worry about France, don’t worry about England, worry about Germany. Germany has 3,000 companies doing active business right now. They are not going to join the sanctions…period.”
I thought the EU was at least a year out from this decision. If the EU follows Germany’s lead (and many of the nations of the EU owe Germany money) and join the multi basket of currencies that much of the world has joined……..the dollar will collapse.
This is really serious, folks. Germany and France are the leading nations of the EU, and of the two, Germany is the strongest. I don’t know if one member can dump the dollar without the agreement of the other 27 members (many are weak, and in debt to Germany). If Germany can move on their own, the rest will follow, because they will have to in order to operate.
The US is run by fools. They have done everything wrong. I have been disgusted and horrified by the behavior of the leaders, they do NOT represent the will of the people, they don’t care what we think. Bullying, spying, sanctions on nations that don’t use the dollar…….all these acts have made the US look aggressive, and foolish in turn. All they can do is offer threats and sanctions…….they have NOTHING left.
Oscar Wilde once said “we have nothing left to offer but compliments, they are the only things that don’t cost money.” Pity, the US didn’t learn from him…….compliments win a lot more friends and support than threats.
This is an unmitigated disaster. If this happens on Obama’s watch, he will replace Clinton as the worst president we ever had. Calling the Russians a rogue nation makes true what many psychologists say: “Ask a man about another, and he will tell you all about himself.”
For God sakes, the US is the rogue nation. Russia now has an alliance of over half the world…….the US is relying on the EU to avoid collapse of the US dollar. If the US loses the EU, the game is over for the US, and millions of fools who right now think they are doing just fine will be screwed. I have no sympathy for them, greedy people deserve the worst life can bring them.
But, millions of people struggling with skyrocketing prices now, living on a fixed income will really be hurt. Suicides will skyrocket as well because they will not be able to survive, and most people will not accept the prospect of homelessness. This is happening so much faster than I foresaw. I saw this coming, but now it is upon us.
Russia has China, India, Brazil, Turkey, Iran, South Africa and many emerging African nations, much of South and Central America, Argentina……much of the world economy using their system. New Zealand and Australia dumped the dollar, also India and Japan. Obama gave Japan a pass, whatever that means.
For those who need a quick review, it started in 2010 with Hugo Chavez and his tiny organization, the South American Trade Association. He introduced the first electronic currency, the Sucre, so that member nations could trade with each other using their own currencies, leaving the dollar out. The Sucre translated the value of each currency at the time of transaction, making the need for any world reserve currency obsolete. It was a tiny organization, and it flew under US radar.
Russia and China watched it closely. In November, 2010, they adopted a similar model between each other, trading with each other, leaving the dollar out. They went on to recruit much of the world, and finally went public only a month ago. I was surprised, because I had been watching it since 2010. As it stands, they hold the majority of the world market. There are many more aspects to this, but this is enough for now. The US is in deep trouble, and the leaders are too damn stupid to know it. Fools and their money are soon parted.
The White House has issued a pointed statement declaring it hopes and expects the UK will use its influence to ensure that high standards of governance are upheld in a new Chinese-led investment bank that Britain is to join. In a rare public breach in the special relationship, the White House signalled its unease at Britain’s decision to become a founder member of the Asian Infrastructure Investment Bank (AIIB) by raising concerns about whether the new body would meet the standards of the World Bank.
The $50bn (£33.5bn) bank, which is designed to provide infrastructure funds to the Asia-Pacific region, is viewed with great suspicion by Washington officials, who see it as a rival to the World Bank. They believe Beijing will use the bank to extend its soft power in the region.
A White House spokesman stated “it is up to individual countries to decide on joining a new China-led lending body”, as media reports said France, Germany and Italy also agreed to follow Britain’s lead and join the Asian Infrastructure Investment Bank (AIIB). He further added “This is the UK’s sovereign decision. We hope and expect that the UK will use its voice to push for adoption of high standards.”
George Osborne – who has discussed the decision to become a founder member of the investment bank with his US counterpart, Jack Lew – has been the driving force behind developing closer economic ties between Britain and China. The chancellor has led the way in encouraging Chinese investment in the next generation of civil nuclear power plants in the UK and he ensured that the City of London would become the base for the first clearing house for the yuan outside Asia.
The US administration made clear in no uncertain terms its displeasure about Osborne’s decision to join the AIIB. A US official told the Financial Times: “We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power.”
Britain was unsurprised by the decision of the US administration to air its concerns in public after the formal announcement that the UK would join the new investment bank. Sources said, in addition to the talks about British plans between the chancellor and the US treasury secretary, British and US officials have been in regular contact ahead of the announcement. UK officials say that, by joining the bank as a founding member, Britain will be able to shape the new institution.
In its statement to the Guardian, the White House national security council said: “Our position on the AIIB remains clear and consistent. The United States and many major global economies all agree there is a pressing need to enhance infrastructure investment around the world. We believe any new multilateral institution should incorporate the high standards of the World Bank and the regional development banks.
“Based on many discussions, we have concerns about whether the AIIB will meet these high standards, particularly related to governance, and environmental and social safeguards … The international community has a stake in seeing the AIIB complement the existing architecture, and to work effectively alongside the World Bank and Asian Development Bank.”
Human rights groups and others have complained that the UK has become too willing to placate China – particularly in light of its muted comments over the tight restrictions set out for voting rights in Hong Kong – but Thursday’s remarks seem to be focused on the bank.
“I think the US has had its questions about the UK posture towards China on other issues and I suppose this announcement probably triggered renewed concern in Washington about overall British politics vis-à-vis China. But [we] don’t normally arbitrate these things in public and I’m a little unsure as to why the US has chosen to pick a fight with the UK on this bank at this time, because I thought it had somewhat softened its posture on the bank. It’s a bit surprising to me,” said Matthew Goodman, senior adviser for Asian economics at the Center for Strategic and International Studies.
Goodman said the US had legitimate questions about the AIIB when it was first announced last summer, such as the governance of the institution, its lending standards and procurement rules.
“Notwithstanding that, I think they should have been more willing to engage in discussion with China and others about the institution. There’s a big infrastructure gap in Asia, existing institutions are not filling it and China has the wherewithal to contribute on the right terms.”
Some surmised that the US was responsible when Australia backed away from signing up to the bank at the Asia-Pacific Economic Cooperation summit in Beijing last autumn, after widespread speculation a deal was on the cards.
“The US did reach out to Australia, Koreans and others to consult about questions and concerns, and that’s been interpreted as leaning on allies not to join the bank,” said Goodman.
As the world’s second largest economy, China has grown increasingly frustrated that it does not have more influence at the IMF and World Bank, and sees little prospect of more say regarding the Japanese-backed Asia Development Bank.