I’ve noted in recent blogs that there is a quiet move afoot away from the dollar as a reserve currency. Already China and Russia have concluded bilateral talks to avoid the dollar as a reserve currency and make their currencies directly convertible. Japan and China recently concluded a similar agreement. Now, India has joined the ranks of the burgeoning Asian economies to do so:
The central importance here is the following paragraph:
To summarize: Japan, China, Russia, India and Iran: the countries which together account for the bulk of the world’s productivity and combined are among the biggest explorers and producers of energy. And now they all have partial bilateral arrangements, and all of which will very likely expand their bilateral arrangements to multilateral, courtesy of Obama’s foreign relations stance which by pushing the countries into a corner has forced them to find alternative, USD-exclusive, arrangements.
The geopolitical consequences, in other words, are that the West’s bellicosity toward Iran (and the Middle East as a whole) are increasingly being met by two things: (1) the Asian powers dumping the dollar as a reserve currency and entering into bilateral currency and trade agreements and (2) a greater geopolitical cohesion among those nations.
In short, India, China, Japan, and Russia are simply not afraid of the ability of the US and European militaries and their ability to prop up the dollar. So what does this portend? if current western policies continue on the course that they are embarked upon, we will see more and more countries in Asia – Malaysia, Thailand, Indonesia and so on, with the probable exception of Australia and New Zealand – joining in similar arrangements as the West works feverishly to keep the remaining Islamic crescent subdued, divided, and in thrall to backward Islamicist regimes. With the recent US assurances to Australia, we can expect the Asian bloc to harden.
…and remember, all those fake bearer bond stories have one thing in common: they’re all coming out of Asia.