– What Petrodollar: Russia, China To Create SWIFT Alternative (ZeroHedge, Sep 10, 2014):
If, when in February Victoria Nuland infamously launched a (not so) covert campaign to replace the ruling Ukraine president oblivious to the human casualties, resulting in a civil war in east Ukraine, NATO encroachment along the borders of Russia, and a near-terminal escalation in hostilities between Ukraine, Russian, and various regional NATO members, the US intention was to provoke the Kremlin so hard that the nation with the world’s largest reserves of mineral and energy resources would jettison the US Dollar and in the process begin the unraveling of the USD reserve currency status (as much as Jared Bernstein desires just such an outcome) it succeeded and then some. Because in the end it may have pushed not just Russia into the anti-petrodollar camp… it appears to have forced China in it as well.
According to Itar-Tass, Russia and China are discussing setting up a system of interbank transactions which will become an analogue to International banking transaction system SWIFT, First Deputy Prime Minister Igor Shuvalov told PRIME on Wednesday after negotiations in Beijing.
“Yes, we have discussed and we have approved this idea,” he said.
But wait: wasn’t it the UK’s desire to force Russia out of SWIFT just two weeks ago? Why yes, and the fact that Russia is happy to do so, and on its own terms, once again shows just who has all the leverage, and who really needs, or rather doesn’t, the US Dollar.
More from Tass:
Russian authorities wanted to decrease the financial market’s dependence on SWIFT since the introduction of the first U.S. sanctions, when international payment systems Visa and MasterCard denied services to some Russian banks owned by blacklisted individuals.
According to Shuvalov, Russia has been also discussing establishment of an independent ratings agency with China. Concrete proposals will be made by the end of 2014, he said.
As regards China’s payment system UnionPay cooperation with the yet-to-be-established Russian national payment system, Shuvalov said that UnionPay is ready for a full-scale collaboration and will provide all infrastructural capacities for that.
The conclusion will be a repeat of what we have said every single time we report on the Eurasian alliance’s drift away from the petrodollar, as stated most recently two weeks ago:
We will merely say what we have said previously, and it touches on what will be the most remarkable aspect of Obama’s legacy, because while the hypocrite “progressive” president who even his own people have accused of being a “brown-faced Clinton” after selling out to Wall Street and totally wrecking US foreign policy abroad, is already the worst president in a century of US history according to public polls, the fitting epitaph will come when the president’s policies put an end to dollar hegemony and end the reserve currency status of the dollar once and for all, thereby starting the rapid, and uncontrolled, collapse of the US empire. To wit:
In retrospect it will be very fitting that the crowning legacy of Obama’s disastrous reign, both domestically and certainly internationally, will be to force the world’s key ascendent superpowers (we certainly don’t envision broke, insolvent Europe among them) to drop the Petrodollar and end the reserve status of the US currency.
And once China and Russia show that not only can it be done but thanks to US prodding it has been done, expect other countries to promptly follow the anti-SWIFT axis on their own…
Russia and China have already created alternatives. Hugo Chavez proved a reserve currency is no longer necessary thanks to technology. Chavez introduced the first electronic currency, the Sucre, in Spring of 2010 to his tiny South American Trade Alliance. It had to be a small organization, or the US would bomb them out of existence. As it was, it flew under US radar. For the first time, member nations could trade with each other using their own currencies, the Sucre translated the value of each currency at the time of transaction.
Russia and China set up an identical system for themselves in November of 2010. China went on to recruit Turkey, Iran, other small middle eastern nations sick of US bullying. They recruited most emerging nations in Africa, including South Africa. They recruited many nations in South and Central America. They did it quietly, but effectively.
The US as the lone super power had become a bully of the worst kind.
India and Japan joined after another round of sanctions on Iran, a nation that is rich and is a fruitful trading partner to much of the world. Australia and New Zealand dumped the dollar last year. Switzerland joined BRICS about 5 weeks ago.
BRICS, short for Brazil, Russia, India, China and South Africa was launched a couple of months ago. They allow member nations to use their own currencies, an electronic currency simply translates the value of each nation’s currency at the time of transaction. As of right now, 67% of all nations are allied with BRICS, 33% use the dollar.
By the end of this year, it will be under 20%. The entire idea of a world reserve currency is now obsolete thanks to technology…….once the creation of the US……..
As soon as the EU dumps the dollar, it will collapse completely. The chance that will happen under Obama’s inept rule is very high. The EU keeps the dollar afloat, but for how long? They are not united in anything.
The American model ought to teach the world why the Roman and American republic was not an effective model……it is too easily hijacked. The UK has a great system, the parliamentary system, and it allows every group their voice. Rotten apples can be thrown out, in this system, there is no way to get rid of any of them.
This needs clarifying…….
http://wtfrly.com/2014/09/10/report-china-moves-12000-troops-to-russian-border/
The genius of Putin is that he didn’t waste one minute reinventing the wheel. He had developed an economic system almost identical to the one held by the west…….with one major difference. All the key players are solvent.
To Squodgy: See the article on todays post…..Russia showed up with 100,000 men.