Posted on 07/23/2022 4:57:05 PM PDT by EBH
And once again, as happens often with consequential news in the United States and the West, no one has noticed and no one seems to care.
If you’ve blinked over the last month, you may have missed it…
China and Russia are taking their shot at the U.S. dollar. And as often happens with consequential news in the United States and the West, no one seems to notice or even care.
Since the beginning of the year, I have been writing about the possibility of Russia and China challenging the US dollar’s global reserve status. Now, it’s happening.
It shouldn’t be any surprise to those paying attention that Russia and China are strengthening their economic ties amidst continued Western sanctions on Russia as a result of the country’s war in Ukraine.
What may surprise some people, however, is that Russia and the BRICS countries, including Brazil, Russia, India, China, and South Africa, are officially working on their own “new global reserve currency,” RT reported in late June. Nobody even seemed to notice.
“The issue of creating an international reserve currency based on a basket of currencies of our countries is being worked out,” Vladimir Putin said at the BRICS business forum last month.
And of course, as Russia has been cut off from the SWIFT system, it is also pairing with China and the BRIC nations to develop “reliable alternative mechanisms for international payments” in order to “cut reliance on the Western financial system.”
In the meantime, Russia is also taking other steps to strengthen the alliance between BRIC nations, including re-routing trade to China and India, according to CNN:
President Vladimir Putin said Wednesday that Russia is rerouting trade to "reliable international partners" such as Brazil, India, China and South Africa as the West attempts to sever economic ties.
"We are actively engaged in reorienting our trade flows and foreign economic contacts towards reliable international partners, primarily the BRICS countries," Putin said in his opening video address to the participants of the virtual BRICS Summit.
In fact, “trade between Russia and the BRICS countries increased by 38% and reached $45 billion in the first three months of the year” this year, the report says. Meanwhile, Russian crude sales to China have hit record numbers during Spring of this year, edging out Saudi Arabia as China’s primary oil supplier.
"Together with BRICS partners, we are developing reliable alternative mechanisms for international settlements," Putin said.
Putin continued, stating last month: "Contacts between Russian business circles and the business community of the BRICS countries have intensified. For example, negotiations are underway to open Indian chain stores in Russia [and to] increase the share of Chinese cars, equipment and hardware on our market."
In June, Putin also accused the West of ignoring"the basic principles of [the] market economy" such as free trade. "It undermines business interests on a global scale, negatively affecting the wellbeing of people, in effect, of all countries," he said.
President Xi echoed Putin’s sentiments, according to a June writeup by Bloomberg:
“Politicizing, instrumentalizing and weaponizing the world economy using a dominant position in the global financial system to wantonly impose sanctions would only hurt others as well as hurting oneself, leaving people around the world suffering. Those who obsess with a position of strength, expand their military alliance, and seek their own security at the expense of others will only fall into a security conundrum.”
Today’s article is not behind a paywall, because I believe its content to be too important -
The developments obviously further my long held belief that a gold backed global reserve currency is on its way - something I have been writing about for months.
I’m also stunned that nobody seems to care that arguably the largest shift on the global macroeconomic playing field over the last half century may be taking place.
Sure, under the context of the conflict in Ukraine, the news may seem “par for the course” of sorts, which may result in the media and the financial world downplaying it. But put this piece of information out there on its own, without context - that there is a coordinated global challenge taking place to the U.S. dollar - and it would be the biggest news story in decades. Imagine if China and Russia just dropped this out of nowhere? Now, remember that both countries have been working on, and preparing for, this situation for years.
I mean, holy hell, look at Russia’s Treasury holdings as far back as 2018: link to article with charts
As I’ve noted before, Russia was also increasing its holdings of gold over the same period:
And this headline came out in 2020, just months before Russia’s invasaion of Ukraine
Does anyone think it’s a coincidence?
Nikkei wrote at the time:
Dedollarization has been a priority for Russia and China since 2014, when they began expanding economic cooperation following Moscow's estrangement from the West over its annexation of Crimea. Replacing the dollar in trade settlements became a necessity to sidestep U.S. sanctions against Russia.
Ergo, it seems to me that the BRIC nations understand exactly how precarious of a financial situation the U.S. - and our dollar - is in. Despite the dollar’s recent strengthening, these nations have been in the midst of a multi-decade-long plan to de-dollarize. Even before the Ukraine conflict started, both China and Russia were stockpiling gold and working on denominating transactions outside of the U.S. dollar. It was another “secret” that was out there in the open.
Remember how “insane” this headline was just 6 months ago when I predicted it for the first time?
Everybody told me that it was a stretch. Today, it isn’t so much anymore.
Meanwhile, since the BRIC conference, ties between Russia and China continue to tighten, with Japan even warning this week about the pair’s “strengthening of military ties” - at the same time China has closely scrutinized a planned trip by House Speaker Nancy Pelosi to Taiwan.
Japan said this past week:
“As a result of the current aggression, it is possible that Russia’s national power in the medium- to longterm may decline, and the military balance within the region and military cooperation with China may change.
In the vicinity of Japan, Russia has made moves to strengthen cooperation with China, such as through joint bomber flights and joint warship sails involving the Russian and Chinese militaries, as well as moves to portray such military cooperation as strategic coordination.”
Japan said this alignment between the two countries “must continue to be closely watched in the future.”
While the economic gears turn behind the scenes, China is also becoming incresingly cagey about Taiwan. The country “has sent warplanes into Taiwan's self-declared air defense zone identification zone many times in recent months,” according to CNN, and recently alluded to the idea of a no-fly zone over Taiwan ahead of a planned visit by Nancy Pelosi.
President Biden commented on Pelosi’s travel plans this week, stating: “The military thinks it’s not a good idea right now. But I don’t know what the status of it is.”
We’re sure Pelosi will wind up going anyway. Remember, this is the same woman who danced her way through Chinatown while Covid was spreading to the U.S., from China, to prove she wasn’t racist.
I can hear her en route to Taiwan now:
“I negotiate million dollar stock trades for breakfast, I’m sure I can handle this Euro trash.”
With all the debt.......
I think here it comes.
🙏🙏✝️🛐🛐🛐
LOL yeah but that’s lowering them from what 25%?
The Ruble is artificially high because of all the restrictions Russia put in place, like not being able to take dividends out of the country, exporters, being required to convert half their proceeds into rubles.
It’s not a free market exchange rate so it means nothing.
The western governments forced this by weaponizing financial sanctions and banking access.
—> The moment we SWIFT’d Russia, the US Dollar as the global reserve currency lost most of its value to the world, as, literally, EVERY COUNTRY now has to wonder if they’re next for being SWIFT’d, and thus losing their dollar holdings.
+1
I bet that the accumulated Russian inflation for 2022 is going to be below that of the US. It is actually a factor of globalization and going to get better once Russia fully decoples from the Western system.
Biden’s boomeranging suicide sanctions are pushing Russia further and further into China’s dark embrace.
Iran and Argentina are the newest BRICS members. This new bloc is filling the vacuum in food and energy production that the west has renounced. The new BRICS currency will be based on energy and food production. The dollar is transitioning to being based on our main exports, climate lies and perversions.
April 4, 2022
Our economic soothsayers predictions for Russia:
Goldman Sachs has forecast a 10% contraction in Russian GDP this year, while the Institute for International Finance think tank has projected a more damaging 15% plunge.
In a note Wednesday, economists at Capital Economics projected that Western sanctions are likely to push Russian gross domestic product into a 12% contraction in 2022, while inflation is expected to exceed 23% year-on-year.
Russia central bank update:
▪️The Central Bank of the Russian Federation improved the forecast for the Russian GDP for 2022, expects a reduction of 4-6% against 8-10%;
The Bank of Russia lowered its key rate to 8%, lower than pre 24th February levels.
▪️The Central Bank of the Russian Federation will assess the feasibility of reducing the key rate in the second half of 2022;
▪️Annual inflation in Russia, according to estimates as of July 15, decreased to 15.5%;
A new Axis of Evil has formed. It’s missing Iran but they will join before long.
What exactly is evil about this axis? Most of the world believes they are the good guys.
I see the GDP contraction as not impossible but unlikely if the Russian cent bank is not going to drop thebruble value a bit. There is going to be a powerful rebound in 2023 on import substitution.
“but unlikely if the Russian cent bank is not going to drop thebruble value a bit.”
______________________________
Nabiullina is trying as hard as she can. That’s why she dropped the interest rate to significantly lower than pre “special military operation” level.
But, the fact that she lowered the GDP projection from 8-10% to 4-6% is very significant since the big knock on her has been that she is always “too cautious.” So far Russia has surpassed all her previous projections this year.
“Russia And China Officially Announce A “New Global Reserve Currency””
i’ve been thinking about officially announcing one myself ...
It is largely in the stock market right now. Even if bad for the exporters, the ruble rate is close to the fundamentals. If the stock market is to regain its pre-crisis nominal value, Russia is likely to surpass all the Euro countries but Germany , and also surpass India per nominal GDP.
It will surpass Germany mid-term as well.
Leftist think it is great and most neocons are too stupid to notice.
Gold backed too. In the near future every country will be on a gold backed currency.
Thank you. Very nice. Andrew Jackson and Chester Arthur had the correct views of who makes the money.
bmark
And American citizens can get their US dollars out of American banks?
Didn't some American banks in conjunction with each other a few months ago, decide to cancel the accounts of some President Trump supporters and deny them banking facilities?
Not to mention this new reserve currency is neither the Yuan nor the Ruble, but a new currency supported by the BRICS countries including India and Brazil as well as China and Russia.
And why should these countries hold their reserves in dollars when Dementia Joe just keeps over spending by Trillions of dollars and making it up massive printing of new dollars or borrowing.
Russian inflation rate 2021 6.9% 2022 17.8%
Can you tell us what the latest US inflation rate is?
Is it not 9.1% which is higher than the Russian 6.9% you are just trashing?
I don't think we have much to worry about
Oh we do,
The BRICS countries make up close to 50% of the world's population already, with new members joining even as we speak.
Is it going to have effect on America if these countries take their reserves elsewhere? Of course it will.
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