De-Dollarization of trade increase paces

Posted: March 20, 2015 in Uncategorized

As I always say one “hidden” side of the Cold War Reloaded is the De-Dollarization.

Practically both Russia and China understood that the basis of the US power is the US Dollar. As long as the US Dollar is the world reserve currency, the US can run infinite budgets and a super powerful defence force.

Most of the flows is due to the fact that oil is priced in USD.

In the last years, the attentive observer would have seen numerous deals avoiding USD – in Egypt, in China, in Argentina and specially in Russia.

In October, China, Brasil ,Russia and South Africa founded the New Development Bank (commonly known as BRICS Bank) as a sort of “anti IMF” US backed bank.

In 2015 the issue is clearly stepping up a notch.

China is reading to launch by September/October 2015 the new SWIFT interbanking money transfer service CIPS.

China also launched the Asian Infrastructure Investment Bank (AIIB).

UK, even publicly rebuffed by the US (!!) joined it . Luxembourg and Australia have applied. Germany, Italy,France just announced they will join. South Korea is leaning towards it. These are biggest allies of the US!!

Also Gold, previously an unregulated market, just became regulated and it seems (not yet confirmed) that some Chinese banks will assume a principal member role (11 members are requested).

This is a different aspect of the Cold War Reloaded which will have immense consequences.

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