An interesting interview with Janet Yellen was released by CNN earlier, where she’s asked not only about the Russian sanctions and their putative effect, but on the current hot-topic issue of the global de-dollarization as a consequence of those sanctions.
Maybe not officially however Australia wields great influence on it
News Flash from DFAT:
ASEAN and Australia
Australia became ASEAN’s first Dialogue Partner in 1974. Through major ASEAN-led arrangements, such as the East Asia Summit, ASEAN Regional Forum, ASEAN-Defence Ministers' Meeting-Plus, we collaborate closely and on the region’s trade and economic agenda. We strongly support the principles of the ASEAN Outlook on the Indo-Pacific (AOIP).
Since 2013, Australia has a resident ambassador accredited to the ASEAN Secretariat in Jakarta.
Makes a lot of sense. The perfect servile, obedient apparatchik. Most of these people are appointed merely to be the front-facing 'spokesmen' for these various fraudulent mafia institutions. So they choose people who happen to be eloquent and loyal, or simply good at public speaking, etc., intelligence need not apply.
Apr 18, 2023·edited Apr 18, 2023Liked by Simplicius
Having completed an advanced econ degree at a well regarded graduate school, after serving in the US Army, I would warn everyone against putting their faith in academic economists in general. With rare exceptions they are spawned amid a fantastical cloister hence close to clueless when faced with real world circumstances. Those who find their way into government bureaucracies are likely to be among the worst of the worst.
I have an MBA in Finance and learned all sort of mumbo jumbo when all that counted was 911 and instant liquidity it bought so that apparently intelligent people were willing to invest in 30 year bonds paying only 2-3%, and that is where our Social Security money went. I will be watching to see what we pay for a barrel of crude versus what Russia get from India and China. I think the price drop in oil was because of oversupply and OPEC+ cut production by a million barrels.
The fact that Keynesian theory is still a leading theory amongst the academy is living proof of your criticism and warning. Always meant to be short term and focused it's uses is one of the reasons we are so far in debt.
John Maynard foolishly recommended the short term snorting of coke, not considering the long term usage by the addict.
And Sir Sim, thanks for the article. Good Stuff. But a tiny quibble. You owe me for having to watch Yellen and Zakaria together. One of them is punishment enough but the both of them is cruel and unusual. Shame on you.
Absolutely and everyone who hasn't grasped what the trap is was entering the fools game - better known as PONZI SCHEME - of everlasting growth before even other REAL WOLRD "inevatibilities" entered the stage ...
You will never convince a DRUG ADDICT giving up its addiction by offering more of the same ....
Apr 18, 2023·edited Apr 18, 2023Liked by Simplicius
Does it not appear more like the far left, a global fascism that is failing before the world. ( Here defining “left” as State Tyranny and “right” as anarchy, or zero government)
My concern, and it is a growing one, is of no winners, of a global depression, and the potential for global war.
global war provides the means to reduce a significant the number of people who inhabit the planet and may be quicker than offing them through pandemic mongering. This satisfies the Malthusians who, like their Calvinist forbears, are unhappy living with people who find their thinking insane. Instead of incinerating the heretics with wood or gassing them in shower the eugenicists finds nuclear gets the job done more quickly and efficiently. Clean up crews not needed for decades while they perfect the transition to post humanism.
"A" being convinced by its female partner "E" to abandon THE WISDOM AND MIGHT of THE CREATOR of SPACE AND TIME - commonly called common sense / evolutionists (not really believing their own horse m...) calling it evolution - for the narrative of THE HUMAN MIND "all I can see is all there is, which has to be perfected according to linear sequential reasoning" with all the undeniable consequences....
She is a ding who can't manage her own country's economy and fudges the numbers, and here she pretends to know something about another country's economy? God help us; cretins rule us.
Apr 18, 2023·edited Apr 18, 2023Liked by Simplicius
Looks like DC's hubris may finally be taking dollar hegemony down in which case we are all going to suffer as a consequence. Enormous distortions, many decades in the making, will be wrung from the monetary system. The Fed will be forced to respond with accelerating dollar debasement. Financial paper wealth will vaporize as a consequence. Physical assets offer refuge, particularly liquid assets (i.e. precious metals).
Ultimately that is true but the transition will be characterized either by deflationary or inflationary collapse as many decades of monetary and fiscal distortions are wrung from the system which will be enormously painful with pensions, along with all other financial institutions and the US government, defaulting in either nominal or real terms. Thereafter Americans will have to produce value to get value overseas so they will be working harder and consuming less (lower real wages). But, as you note, that is in fact how it must be ultimately. The US has been living well beyond its means for decades as it exchanged unbacked "printed" currency for real goods with foreigners holding on to the currency rather than handing it back in exchange for real goods.
I wish that that famous coyote running in the air would finally fall.........but I think we are for a long haul in this dedollarisation process. Thank you for your informed article.
Look at all our "allies" in Europe and Asia who are willing to play along with the dollar as it seems to be working well for them (smirk, smirk), and in the East we have Japan, South Korea and Taiwan (smirk smirk). Does Taiwan trade in Chinese currency, or just US? What was Japan doing meeting with Russian diplomats earlier in the week? If Japan goes independent currency and buys Russian oil, we're cooked. All we can rely on then is Australia where we have 5 Eyes.
Well....Australia was one of the very few countries that goose-stepped lemming-like into Viet Nam. And they never gave a second thought to locking up their citizens, like China and most of the Western World over the Media Flu.
I come over here, to your superb sub-stack to learn from the bright bulbs. My bestie is one of those; thank goodness he is a paid subscriber🐈⬛ Meanwhile, back here at the North 40…Glory to Mother Russia; I dare say, I pray to live long enough to see the Great Work, take wings. I feel it, in my bones. 💙🇷🇺❤️
There is still a "moment" which has to pass, where a true alternate to USD is available. Or, more importantly. SWIFT.
Imagine you are a small or medium (or large) enterprise, non US or non EU. How do you buy and sell goods and services? To date - all bank transfers are conducted via SWIFT (which is just a bank messaging system, but runs through Brussels and is largely controlled by NY). The VAST majority of international commerce is conducted in USD. An Egyptian company buying plastics from China? USD. A Thai company buying textiles from India? USD. An Australian company selling machine goods to Angola? USD. Even the mighty Chinese, the world's largest exporter, conduct the vast majority of their exports in USD. And since the Chinese still have capital controls, a business has NO CHOICE; its not like you can ask them "hey, I want to pay you in Yuan". Its USD or nothing. Emmanuel Macron once quipped that when Air France wants to buy aircraft from Airbus, they have to buy them in USD.
Then you have the various diktats that DC (via the treasury department) orders various national central banks to do in terms of sanctions and US citizens. What winds up happening is that the central banks of other countries enforce US sanctions more enthusiastically than American banks do simply to remain in the good graces of DC, because all USD transactions (the backbone of international trade) clear through NY and are conducted via SWIFT. And so you wind up with the soup of banking acronyms: FATCA, KYC, PPP, PEP, UBO, RED, AML and so on and so forth which frankly exist entirely as bastard children of US compliance demands.
So, in practice, any attempt to set up a parallel structure is met with ire and sanction from DC/NY/Brussels (a major deterrence) and ordinary people living all over the world - businessmen, executives, staff, average joes - conduct their day to day lives under the implicit approval of the USD. Use a Visa or MC? Have a bank account? A mortgage? A business loan? If you somehow find yourself sanctioned by DC your life is OVER. Just think about the implications of that - imagine being sanctioned by, say, Japan. Or Brazil. Unless you live in those two countries or a neighbour, chances are you won't even notice. But the US - you're done.
I have known many people who lived as "unbankable" - Sudanese, Iranians, Iraqis, Syrians, and now Russians. If ever a WMD truly existed that needed to be purged from humanity, that is it.
What Yellen is freaked out about is the self-imposed "gap in the market". Nobody cares or notices when a country like Syria is sanctioned. But Russia; that creates a giant hole in the global market which MUST BE FILLED. And so necessity is the mother of all innovation and the sanctions have created the perfect incubator for an alternate to the USD & SWIFT
That is what she is losing sleep over. And rightly so.
Interesting. Which bank is it? That means that the infrastructure exists already which im not surprised in SE Asia. My understanding of how Yuan trade is settled is that the Chinese central Bank receives non-yuan payments on behalf of account holders and then pays out Yuan to account holders. To a large extent, it is simply not possible to open a Yuan account outside of china. In my part of the world I cannot for example, and am forced to use USD. I guess where you are there is a limited Yuan float. Thanks for your comment
That means the client bank's USD were converted to yuan by the Chinese forwarding bank via it's Central Bank. Still involves the USD and SWIFT (I guess).
The notion that Russia depends on China for its weapons systems is risible. Whatever components Russia buys from China are likely 1) easy to get and less important, thus why get them anywhere else, and 2) if they become harder to get, Russia will develop the technology itself, which it is quite capable of.
I suspect most of these statements about Russia weapons depending on China are the exact opposite of reality. As Andrei Martyanov continually points out, China is at the moment dependent on Russia for weapons technology (not the production of same, the actual technology.) China needs to up its game in hypersonic weapons and there is only one source for that: Russia.
This is why the Chinese Defense Minister arrived in Russia yesterday and directly met with Putin - which is almost unheard of. You can be sure the discussions revolved around Russian technology transfer to China to counter US superiority in submarines and the provision of Russian hypersonic technology to enable China to further counter the US Navy in the Pacific. These are the only real weaknesses China has vis-a-vis the US in any conflict over Taiwan.
Also, I recall reading something about the importance of rare earth metals in US military equipment and the fact that China basically has the monopoly on these. Surely an important, if not fully acknowledged, Achilles heel in US military might?
Funny how the expression ‘unintended consequences’ springs to mind - I can only assume ‘our team’ thought they’d win hands-down within weeks. Only the other day a learned it took 2 years to plan and strategise for the storming of Normandy beaches in WW2. Makes you wonder how much deep thinking and serious planning our current strategic geniuses are up to.
It will be lost in the dust of History, but the U.S. City-State, Washington, District of Corruption's endless marginalizing Russia, instead of making Russia a strategic partner, should go down in history as worse than Dubya's Iraq stupidity.
Another excellent piece sir. Can definitely see the concern in her eyes. I hate these people with every fiber in my body. The mind fuckery they use on Western Citizens is horrible and it’s going to get worse and much faster now. The pressure is on big time. The elites can still taste victory but it now appears they’re moving backwards away from the finish line.
I am under no illusions as to what this will look like as the dollar looses relevancy. I suspect more inflation is on the way and we will see it in all the necessary items. There are plenty of circumstances out there now that could literally create a complete meltdown. Unfortunately not much we can do aside from preparation.
This is not fundamentally about the US. It is about the failing grand plan of the tribe which controls the US and to which she belongs. That tribe includes her 2 Fed predecessors, the controllers of US finance, media, big tech, Summers, Blinken, Nuland and a great swathe of Brandon's administration. Over many hundreds of years they have penetrated and exploited nations, leveraging success in one to move into control of another.
Having brought the US under their control and gained ownership of most of its people's assets, the next step was to be China, led by the investments they made there at the expense of the American and European people. But the stumbling block is the CCP which will allow no one, be they Chinese oligarch or foreign oligarch, to have political power, direct or indirect, that in any way rivals or threatens that of the CCP -- and the CCP understands well how that tribe has subverted and expropriated country after country.
So now the tribe finds that the greatest and latest country they have destroyed, is no longer a stepping stone to anywhere else but the end of the line. The destruction of US (and European) industrial capacity, cultural cohesion and military power, which they wrought for their own ends, is becoming an existential threat to them, because their vassal cannot go toe-to-toe with Russia (which they previously savaged and asset-stripped) and China, either militarily or industrially. And to rub salt into the wounds, their kleptocracy over Ukraine is being effectively wiped out.
Serious panic is starting to develop and, now, the actions of the tribe's cultural warriors threaten the interests of their oligarch members (who fund the cultural warriors), when there is no prospect of getting control of the rising world powers.
The dollar still has long ways to go, before a new global financial system can take its place, mainly because there is no alternative. The yuan will probably not replace it, since China doesn't like an open financial system, they want their capital to stay within China, they love their capital controls. So much so, that some of my Chinese friends here have to do creative deals with family and friends still in China to keep the money transfers "off the books" (I give your family in China a car, and you give me the money in cash). Getting even a couple thousand dollars out of China isn't very easy.
Russia, India, Brasil, and many of the other countries will not be a replacement either, since becoming the currency that will replace the dollar means doing similar things to what the US is currently doing, and suffering the similar consequences, like deindustrialisation, high trade deficit. Also, the currency has to be available in quantities that satisfies the global trade demands. Which means issuing lots and lots of bonds. Which country is going to start becoming indebted, and start printing massive amounts of money, just to replace the USD? No one will. The only way the dollar dies is if the US gov't is no longer trusted to service its debt, like complete economic devastation of the US.
Also, many countries may not use the dollar directly for trade, but those trades are still denominated in dollars. This is where a lot of private bank "issued" shadow dollars come from.
The most likely outcome is regionalisation of the financial system, but who knows.
I don't see the dollar going anywhere for a few more decades at least. We'll see.
The way around this difficulty is plain, and already evolving. There doesn't have to be a single, global currency! Nations just work out mechanisms to trade with each other in ways that do not need the dollar. This is already happening, although I can't find any detailed write up on the exact mechanics used. Eg Russia-China trade, Russi-India trade, China-Malaysia, Singapore, Iran, UAE trade, China-Brazil trade, India-UAE trade .... these are already happening, but I don't know exactly how. I suspect gold exchange at the CB level is involved in all of them. Welcome to the genuinely multipolar world.
Yes, but back then, you didn't need foreign parts for 90% of products. It's a pretty big problem in a globalised economy.
For exanple, we build manufacturing systems for Hungarian companies, and we deal with Chinese, US, German, Italian, Russian (well nowgays not so much) vendors all the time. We currently settle in euros or dollars. But if there are several local currencies, it's way more complicated. It's already a pretty long chain, because we exgchange HUF to EUR, then the Chinese exchange EUR to CNY. That's only because the EUR and the USD is a globally sought-after currency.
So if you want to buy something from Vietnam, and Vietnam doesn't really want HUF, you need to exchange to something they want. Maybe Chinese yuan. But China doesn't really need Hungarian currency either, they have nothing they want to spend HUF on. So you exchange to RUB first, because Russians actually come here for holiday (before sanctions) and they can spend HUF. So you go HUF->RUB->CNY->VND. If any of the exchange rates change, you payment sum changes.
If you need 3 intermediate currencies, it's even worse.
How do you negotiate long-term contracts with such volatility? It's easy to say the dollar is dead, but trying to do business without global currencies isn't a trivial matter.
"trying to do (GLOBAL) business without global currencies isn't a trivial matter." - absolutely BUT -
WHAT DOES ONE NEED A GLOBAL CURRENCY FOR IF business is no longer GLOBAL in a SYNAGOGUE OF SATAN way ... some call it hegemonic, which sounds very much like UNCLE SAM ... otherwise this sham would have probably NOT evolved into the DEMONIC FRANKENSTEIN that it has become .... not being challenged - LIVING BY THE TRUTH - makes one LAZY .... BELPHEGOR the prince of sloth ...
Because people want to live in a modern, advanced society, and for that you need to run a modernised society, you need to make things using technologies, resources and know-how from countries around the globe, especially for smaller countries.
Well said ... PROVING EXACTLY THE OPPOSITE what has been intended .... NOT THE ONLY but one of the REALITIES being that THE PROUD HUMAN MIND has no idea how to do it .... which is why THE SYNAGOGUE OF SATAN has been allowed to create THE HELLHOLE the world is going through ... which has its own PURPOSE ... and no "STRAWMAN" WILL CHANGE THIS FACT ... as prophesied only those HE HAS CHOSEN BECAUSE HE HAS LOOKED INTO THEIR HEART AND FOUND THEM WORTH OF FOLLOWING JESUS CHRIST THE ONLY WAY TRUTH AND LIFE WILL SEE THE LIGHT DESPITE ALL THE DARKNESS .... AMEN HALLELU-YAH!
Instinctively makes sense; if countries have a choice to be truly sovereign by using an alternative payment system why wouldn’t they if they can? It was always a question of reaching the tipping point which it looks like the world has. I’ve wondered why it’s assumed countries must move to a ‘single’ alternative currency; why not trade is a range of currencies, which spreads risks but also economically unites these sovereign partners, who, by virtual of their central bank gold holdings and their commodities should have some stability?
Thank you for another insightful analysis and write-up, including the graphics.
Just a note: Mir is not a Russian version of SWIFT. It's more analogous to Visa or MasterCard. The actual Russian version of SWIFT is called SPFS. I won't include any links here as it's easy enough to find more details on this.
The A in ASEAN won't. They are totally cucked by the Zionist neo cons down there.
Nope, you are dreaming if you think the craven lickspittles in Australia will go against Uncle Sam.
Maybe not officially however Australia wields great influence on it
News Flash from DFAT:
ASEAN and Australia
Australia became ASEAN’s first Dialogue Partner in 1974. Through major ASEAN-led arrangements, such as the East Asia Summit, ASEAN Regional Forum, ASEAN-Defence Ministers' Meeting-Plus, we collaborate closely and on the region’s trade and economic agenda. We strongly support the principles of the ASEAN Outlook on the Indo-Pacific (AOIP).
Since 2013, Australia has a resident ambassador accredited to the ASEAN Secretariat in Jakarta.
Dr. Richard D. Wolff was her classmate at Harvard, notes she was a dim bulb, but very good at following orders.
Makes a lot of sense. The perfect servile, obedient apparatchik. Most of these people are appointed merely to be the front-facing 'spokesmen' for these various fraudulent mafia institutions. So they choose people who happen to be eloquent and loyal, or simply good at public speaking, etc., intelligence need not apply.
Having completed an advanced econ degree at a well regarded graduate school, after serving in the US Army, I would warn everyone against putting their faith in academic economists in general. With rare exceptions they are spawned amid a fantastical cloister hence close to clueless when faced with real world circumstances. Those who find their way into government bureaucracies are likely to be among the worst of the worst.
Hear, here!
Four words: Long Term Capital Management (LTCM).
Literally won the fake "Nobel Prize" in economics and lost more money than my alcoholic cousin buying scratchers.
lacking in accounting acumen, and most macro's have no idea of micro
no idea how things work outside misplaced use of "higher" math.....
I have an MBA in Finance and learned all sort of mumbo jumbo when all that counted was 911 and instant liquidity it bought so that apparently intelligent people were willing to invest in 30 year bonds paying only 2-3%, and that is where our Social Security money went. I will be watching to see what we pay for a barrel of crude versus what Russia get from India and China. I think the price drop in oil was because of oversupply and OPEC+ cut production by a million barrels.
JimG.
Sir, you are not a true believer. Oil has been declared verboten. With the one exception of Private jet fuel.
The fact that Keynesian theory is still a leading theory amongst the academy is living proof of your criticism and warning. Always meant to be short term and focused it's uses is one of the reasons we are so far in debt.
John Maynard foolishly recommended the short term snorting of coke, not considering the long term usage by the addict.
And Sir Sim, thanks for the article. Good Stuff. But a tiny quibble. You owe me for having to watch Yellen and Zakaria together. One of them is punishment enough but the both of them is cruel and unusual. Shame on you.
Great quip and LoL.
Absolutely and everyone who hasn't grasped what the trap is was entering the fools game - better known as PONZI SCHEME - of everlasting growth before even other REAL WOLRD "inevatibilities" entered the stage ...
You will never convince a DRUG ADDICT giving up its addiction by offering more of the same ....
Yup, yup. So very…true, lacking in rudimentary…common…sense as well.
The more dim witted they are the more easily they are mislead by articulating their poorly reasoned theories.
Well Richard Wolff is not exactly a brightly lit bulb either
I can guess what you spend your time doing.
?
I think that Summers meant to say that the US was on the far right side of history.
Does it not appear more like the far left, a global fascism that is failing before the world. ( Here defining “left” as State Tyranny and “right” as anarchy, or zero government)
My concern, and it is a growing one, is of no winners, of a global depression, and the potential for global war.
global war provides the means to reduce a significant the number of people who inhabit the planet and may be quicker than offing them through pandemic mongering. This satisfies the Malthusians who, like their Calvinist forbears, are unhappy living with people who find their thinking insane. Instead of incinerating the heretics with wood or gassing them in shower the eugenicists finds nuclear gets the job done more quickly and efficiently. Clean up crews not needed for decades while they perfect the transition to post humanism.
/sarc
While I can see good arguments for your "theory" I would argue it is much simpler ...
THE ADAM AND EVE COMPLEX ....
Is it just a theory or is it what we are seeing in real time?
Can you elaborate this A&E complex as you see it?
"A" being convinced by its female partner "E" to abandon THE WISDOM AND MIGHT of THE CREATOR of SPACE AND TIME - commonly called common sense / evolutionists (not really believing their own horse m...) calling it evolution - for the narrative of THE HUMAN MIND "all I can see is all there is, which has to be perfected according to linear sequential reasoning" with all the undeniable consequences....
Thanks for your reply. I see where you are going with this now.
She is a ding who can't manage her own country's economy and fudges the numbers, and here she pretends to know something about another country's economy? God help us; cretins rule us.
Looks like DC's hubris may finally be taking dollar hegemony down in which case we are all going to suffer as a consequence. Enormous distortions, many decades in the making, will be wrung from the monetary system. The Fed will be forced to respond with accelerating dollar debasement. Financial paper wealth will vaporize as a consequence. Physical assets offer refuge, particularly liquid assets (i.e. precious metals).
Hang in there. Don't sell. Or tell them to FO and burn it to the ground.
Actually, removing the US dollar as the Reserve Currency, will eventually bring the U.S. back to sanity where value gets created not printed.
Ultimately that is true but the transition will be characterized either by deflationary or inflationary collapse as many decades of monetary and fiscal distortions are wrung from the system which will be enormously painful with pensions, along with all other financial institutions and the US government, defaulting in either nominal or real terms. Thereafter Americans will have to produce value to get value overseas so they will be working harder and consuming less (lower real wages). But, as you note, that is in fact how it must be ultimately. The US has been living well beyond its means for decades as it exchanged unbacked "printed" currency for real goods with foreigners holding on to the currency rather than handing it back in exchange for real goods.
I wish that that famous coyote running in the air would finally fall.........but I think we are for a long haul in this dedollarisation process. Thank you for your informed article.
Look at all our "allies" in Europe and Asia who are willing to play along with the dollar as it seems to be working well for them (smirk, smirk), and in the East we have Japan, South Korea and Taiwan (smirk smirk). Does Taiwan trade in Chinese currency, or just US? What was Japan doing meeting with Russian diplomats earlier in the week? If Japan goes independent currency and buys Russian oil, we're cooked. All we can rely on then is Australia where we have 5 Eyes.
Well....Australia was one of the very few countries that goose-stepped lemming-like into Viet Nam. And they never gave a second thought to locking up their citizens, like China and most of the Western World over the Media Flu.
So. Maybe, just maybe Oz is your guy.
I actually wonder how much ‘freedom of political decision’ Australia has....?
You would be surprised - THEY ARE ALL LOCKED UP IN THE SAME MENTAL PRISON CELL THEY HAVE WALKED INTO .... a long time ago ....
Thanks once again, for pulling together the facts and producing a very readable snapshot of a very relevant topic.
You da man!
She always has that tremor in her voice.
I come over here, to your superb sub-stack to learn from the bright bulbs. My bestie is one of those; thank goodness he is a paid subscriber🐈⬛ Meanwhile, back here at the North 40…Glory to Mother Russia; I dare say, I pray to live long enough to see the Great Work, take wings. I feel it, in my bones. 💙🇷🇺❤️
I am not a "Russia lover". I respect Russia and have lost all respect for the USA.
There is still a "moment" which has to pass, where a true alternate to USD is available. Or, more importantly. SWIFT.
Imagine you are a small or medium (or large) enterprise, non US or non EU. How do you buy and sell goods and services? To date - all bank transfers are conducted via SWIFT (which is just a bank messaging system, but runs through Brussels and is largely controlled by NY). The VAST majority of international commerce is conducted in USD. An Egyptian company buying plastics from China? USD. A Thai company buying textiles from India? USD. An Australian company selling machine goods to Angola? USD. Even the mighty Chinese, the world's largest exporter, conduct the vast majority of their exports in USD. And since the Chinese still have capital controls, a business has NO CHOICE; its not like you can ask them "hey, I want to pay you in Yuan". Its USD or nothing. Emmanuel Macron once quipped that when Air France wants to buy aircraft from Airbus, they have to buy them in USD.
Then you have the various diktats that DC (via the treasury department) orders various national central banks to do in terms of sanctions and US citizens. What winds up happening is that the central banks of other countries enforce US sanctions more enthusiastically than American banks do simply to remain in the good graces of DC, because all USD transactions (the backbone of international trade) clear through NY and are conducted via SWIFT. And so you wind up with the soup of banking acronyms: FATCA, KYC, PPP, PEP, UBO, RED, AML and so on and so forth which frankly exist entirely as bastard children of US compliance demands.
So, in practice, any attempt to set up a parallel structure is met with ire and sanction from DC/NY/Brussels (a major deterrence) and ordinary people living all over the world - businessmen, executives, staff, average joes - conduct their day to day lives under the implicit approval of the USD. Use a Visa or MC? Have a bank account? A mortgage? A business loan? If you somehow find yourself sanctioned by DC your life is OVER. Just think about the implications of that - imagine being sanctioned by, say, Japan. Or Brazil. Unless you live in those two countries or a neighbour, chances are you won't even notice. But the US - you're done.
I have known many people who lived as "unbankable" - Sudanese, Iranians, Iraqis, Syrians, and now Russians. If ever a WMD truly existed that needed to be purged from humanity, that is it.
What Yellen is freaked out about is the self-imposed "gap in the market". Nobody cares or notices when a country like Syria is sanctioned. But Russia; that creates a giant hole in the global market which MUST BE FILLED. And so necessity is the mother of all innovation and the sanctions have created the perfect incubator for an alternate to the USD & SWIFT
That is what she is losing sleep over. And rightly so.
Interesting. Which bank is it? That means that the infrastructure exists already which im not surprised in SE Asia. My understanding of how Yuan trade is settled is that the Chinese central Bank receives non-yuan payments on behalf of account holders and then pays out Yuan to account holders. To a large extent, it is simply not possible to open a Yuan account outside of china. In my part of the world I cannot for example, and am forced to use USD. I guess where you are there is a limited Yuan float. Thanks for your comment
HSBC did Yuan accounts, LOCs, forwards, etc.
That means the client bank's USD were converted to yuan by the Chinese forwarding bank via it's Central Bank. Still involves the USD and SWIFT (I guess).
You've got it. Because "MONEY" is ubiquitous, used without much thinking, everyday, few people fully understand that TRUST is the foundation of money.
And the current crop of U.S. leaders just napalmed trust in the USD.
There is no need WHATSOEVER for any Reserve Currency. Countries can conduct bilateral trade. And Bilateral Trade is healthy trade.
The U.S. dollar as Reserve Currency made the U.S. into a lazy, slothful country, allergic to hard work, addicted to money printing.
The notion that Russia depends on China for its weapons systems is risible. Whatever components Russia buys from China are likely 1) easy to get and less important, thus why get them anywhere else, and 2) if they become harder to get, Russia will develop the technology itself, which it is quite capable of.
I suspect most of these statements about Russia weapons depending on China are the exact opposite of reality. As Andrei Martyanov continually points out, China is at the moment dependent on Russia for weapons technology (not the production of same, the actual technology.) China needs to up its game in hypersonic weapons and there is only one source for that: Russia.
This is why the Chinese Defense Minister arrived in Russia yesterday and directly met with Putin - which is almost unheard of. You can be sure the discussions revolved around Russian technology transfer to China to counter US superiority in submarines and the provision of Russian hypersonic technology to enable China to further counter the US Navy in the Pacific. These are the only real weaknesses China has vis-a-vis the US in any conflict over Taiwan.
Also, I recall reading something about the importance of rare earth metals in US military equipment and the fact that China basically has the monopoly on these. Surely an important, if not fully acknowledged, Achilles heel in US military might?
Funny how the expression ‘unintended consequences’ springs to mind - I can only assume ‘our team’ thought they’d win hands-down within weeks. Only the other day a learned it took 2 years to plan and strategise for the storming of Normandy beaches in WW2. Makes you wonder how much deep thinking and serious planning our current strategic geniuses are up to.
"Our team" ?
They couldn't pull fuzz out of their navels without an instruction book and 2 weeks of training.
I agree - hence the use of quotes - sadly the US has more wrong with it than right yet our leaders are a crowd of wishful thinkers.
It will be lost in the dust of History, but the U.S. City-State, Washington, District of Corruption's endless marginalizing Russia, instead of making Russia a strategic partner, should go down in history as worse than Dubya's Iraq stupidity.
The greatest blunder in Modern History.
Another excellent piece sir. Can definitely see the concern in her eyes. I hate these people with every fiber in my body. The mind fuckery they use on Western Citizens is horrible and it’s going to get worse and much faster now. The pressure is on big time. The elites can still taste victory but it now appears they’re moving backwards away from the finish line.
I am under no illusions as to what this will look like as the dollar looses relevancy. I suspect more inflation is on the way and we will see it in all the necessary items. There are plenty of circumstances out there now that could literally create a complete meltdown. Unfortunately not much we can do aside from preparation.
This is not fundamentally about the US. It is about the failing grand plan of the tribe which controls the US and to which she belongs. That tribe includes her 2 Fed predecessors, the controllers of US finance, media, big tech, Summers, Blinken, Nuland and a great swathe of Brandon's administration. Over many hundreds of years they have penetrated and exploited nations, leveraging success in one to move into control of another.
Having brought the US under their control and gained ownership of most of its people's assets, the next step was to be China, led by the investments they made there at the expense of the American and European people. But the stumbling block is the CCP which will allow no one, be they Chinese oligarch or foreign oligarch, to have political power, direct or indirect, that in any way rivals or threatens that of the CCP -- and the CCP understands well how that tribe has subverted and expropriated country after country.
So now the tribe finds that the greatest and latest country they have destroyed, is no longer a stepping stone to anywhere else but the end of the line. The destruction of US (and European) industrial capacity, cultural cohesion and military power, which they wrought for their own ends, is becoming an existential threat to them, because their vassal cannot go toe-to-toe with Russia (which they previously savaged and asset-stripped) and China, either militarily or industrially. And to rub salt into the wounds, their kleptocracy over Ukraine is being effectively wiped out.
Serious panic is starting to develop and, now, the actions of the tribe's cultural warriors threaten the interests of their oligarch members (who fund the cultural warriors), when there is no prospect of getting control of the rising world powers.
On point. That pesky little tribe running the West for 400 years now is in a lot of trouble now.
The dollar still has long ways to go, before a new global financial system can take its place, mainly because there is no alternative. The yuan will probably not replace it, since China doesn't like an open financial system, they want their capital to stay within China, they love their capital controls. So much so, that some of my Chinese friends here have to do creative deals with family and friends still in China to keep the money transfers "off the books" (I give your family in China a car, and you give me the money in cash). Getting even a couple thousand dollars out of China isn't very easy.
Russia, India, Brasil, and many of the other countries will not be a replacement either, since becoming the currency that will replace the dollar means doing similar things to what the US is currently doing, and suffering the similar consequences, like deindustrialisation, high trade deficit. Also, the currency has to be available in quantities that satisfies the global trade demands. Which means issuing lots and lots of bonds. Which country is going to start becoming indebted, and start printing massive amounts of money, just to replace the USD? No one will. The only way the dollar dies is if the US gov't is no longer trusted to service its debt, like complete economic devastation of the US.
Also, many countries may not use the dollar directly for trade, but those trades are still denominated in dollars. This is where a lot of private bank "issued" shadow dollars come from.
The most likely outcome is regionalisation of the financial system, but who knows.
I don't see the dollar going anywhere for a few more decades at least. We'll see.
The way around this difficulty is plain, and already evolving. There doesn't have to be a single, global currency! Nations just work out mechanisms to trade with each other in ways that do not need the dollar. This is already happening, although I can't find any detailed write up on the exact mechanics used. Eg Russia-China trade, Russi-India trade, China-Malaysia, Singapore, Iran, UAE trade, China-Brazil trade, India-UAE trade .... these are already happening, but I don't know exactly how. I suspect gold exchange at the CB level is involved in all of them. Welcome to the genuinely multipolar world.
As I noted above. The World does not need a Reserve Currency. Most of the World lived without one for centuries.
Yes, but back then, you didn't need foreign parts for 90% of products. It's a pretty big problem in a globalised economy.
For exanple, we build manufacturing systems for Hungarian companies, and we deal with Chinese, US, German, Italian, Russian (well nowgays not so much) vendors all the time. We currently settle in euros or dollars. But if there are several local currencies, it's way more complicated. It's already a pretty long chain, because we exgchange HUF to EUR, then the Chinese exchange EUR to CNY. That's only because the EUR and the USD is a globally sought-after currency.
So if you want to buy something from Vietnam, and Vietnam doesn't really want HUF, you need to exchange to something they want. Maybe Chinese yuan. But China doesn't really need Hungarian currency either, they have nothing they want to spend HUF on. So you exchange to RUB first, because Russians actually come here for holiday (before sanctions) and they can spend HUF. So you go HUF->RUB->CNY->VND. If any of the exchange rates change, you payment sum changes.
If you need 3 intermediate currencies, it's even worse.
How do you negotiate long-term contracts with such volatility? It's easy to say the dollar is dead, but trying to do business without global currencies isn't a trivial matter.
"trying to do (GLOBAL) business without global currencies isn't a trivial matter." - absolutely BUT -
WHAT DOES ONE NEED A GLOBAL CURRENCY FOR IF business is no longer GLOBAL in a SYNAGOGUE OF SATAN way ... some call it hegemonic, which sounds very much like UNCLE SAM ... otherwise this sham would have probably NOT evolved into the DEMONIC FRANKENSTEIN that it has become .... not being challenged - LIVING BY THE TRUTH - makes one LAZY .... BELPHEGOR the prince of sloth ...
Because people want to live in a modern, advanced society, and for that you need to run a modernised society, you need to make things using technologies, resources and know-how from countries around the globe, especially for smaller countries.
Well said ... PROVING EXACTLY THE OPPOSITE what has been intended .... NOT THE ONLY but one of the REALITIES being that THE PROUD HUMAN MIND has no idea how to do it .... which is why THE SYNAGOGUE OF SATAN has been allowed to create THE HELLHOLE the world is going through ... which has its own PURPOSE ... and no "STRAWMAN" WILL CHANGE THIS FACT ... as prophesied only those HE HAS CHOSEN BECAUSE HE HAS LOOKED INTO THEIR HEART AND FOUND THEM WORTH OF FOLLOWING JESUS CHRIST THE ONLY WAY TRUTH AND LIFE WILL SEE THE LIGHT DESPITE ALL THE DARKNESS .... AMEN HALLELU-YAH!
Instinctively makes sense; if countries have a choice to be truly sovereign by using an alternative payment system why wouldn’t they if they can? It was always a question of reaching the tipping point which it looks like the world has. I’ve wondered why it’s assumed countries must move to a ‘single’ alternative currency; why not trade is a range of currencies, which spreads risks but also economically unites these sovereign partners, who, by virtual of their central bank gold holdings and their commodities should have some stability?
Thank you for another insightful analysis and write-up, including the graphics.
Just a note: Mir is not a Russian version of SWIFT. It's more analogous to Visa or MasterCard. The actual Russian version of SWIFT is called SPFS. I won't include any links here as it's easy enough to find more details on this.