Well.... it's finally happening, and now, more or less official: Russia and China are in formal talks to establish an independent system of international financial clearing. Regular readers here know that this is a step that I've been advocating the BRICSA bloc in general and Russia and China in particular would inevitably take. Thus far, however, we have watched the indicators that this was happening, signaled by three things: (1) Russia's stepped up plans to implement its own nationwide internal electronic clearing system, as an alternative to Visa and Mastercard, (2) its more recent requirement that Visa, if it wishes to continue doing business in Russia, has to build a clearing center in Russia, and finally (3) the BRICSA establishment of their own development bank in Shanghai as a counterpart to the IMF and World Bank.
All these things, I've argued, are the stages and steps to the establishment of a parallel system of international financial clearing, one that eventually the BRICSA bloc, and in particular, Russia and China, would eventually have to implement.
Now, the cat is out of the bag; it's official(Thanks to Ms. C.Z. for sharing this important story):
The article minces no words:
On September 10, Russia’s First Deputy Prime Minister Igor Shuvalov met in Beijing with his Chinese counterparts to discuss setting up a system of interbank international transaction clearing that would replace or could, in event of increased US and EU sanctions, replace the SWIFT interbank payment mechanism. According to Shuvalov after his talks in Beijing he stated to the press, “Yes, we have discussed and we have approved this idea.”(Emphasis added)
You'll note that this meeting took place a little over a month ago, and doubtless you'll reflect that little or nothing was said by the lamestream Western media about this significant development.
But wait, there's more, for interestingly enough, the real concern, as the article indicates, is to drive a wedge between Germany and Russia, the fourth and eighth largest economies in the world:
"Russia is reacting to the current escalating financial warfare being initiated via Washington economic sanctions against key leading Russians as part of the current Washington agenda of recreating the tensions and confrontations of the Cold War in their effort to drive a bloody wedge between the EU countries, especially Germany, and Russia. This past March, under strong US pressure, the EU unanimously adopted a series of sanctions against key Russian individuals close to President Putin. The sanctions came as a response to the independence referendum in Crimea in which the vast majority, some 93% of voters opted to request membership in the Russian Federation and secession from Ukraine."
But that's still not all:
"The latest Beijing talks reveal that Moscow is not naïve about the intent of certain Washington circles to escalate the pressures on Russia to a new Cold or even Hot War. China and Russia are also in discussions around creation of a new international credit rating agency independent of the politically-manipulated US credit agencies, Moody’s and Standard & Poors. These moves between the two leading members of the Eurasian Shanghai Cooperation Council countries, and also the two major countries of the BRICS—Brazil, Russia, India, China, South Africa—follow the decision this July in Brazil by all BRICS states to found an alternative to the Washington-controlled IMF and World Bank, creating a BRICS Infrastructure Bank and currency fund.
"Parallel to these moves to decouple from the chokehold of the dollar system, Russia and China are negotiating agreements to conduct major energy trade in their own currencies and not, as has been the accepted practice since the 1944 creation of Bretton Woods System, via the US dollar. Since August 1971 when President Nixon decided to break the legal tie between the US dollar and gold, US power has rested on a system where, whether the dollar rose or collapsed, all nations would be forced to trade using US dollars for oil, commodities and ordinary trade.
"When the Euro first challenged that “reserve currency” role of the US dollar after the 2008 financial crisis, Wall Street and the economic warfare unit of the Obama Administration, the Working Group on Financial Markets, known in Washington as the “Plunge Protection Team,” headed by the Secretary of the Treasury and including the Chairman of the Federal Reserve, Chairman of the SEC and Chairman of the Commodity Futures Trading Commission, coordinated what became the “Greek crisis,” de facto Washington and Wall Street full-scale financial warfare attack on the stability of the Euro, using the Federal Reserve, rating agencies, Wall Street-financed hedge fund speculators and the Treasury of the United States to create the Euro crisis. The dollar rose dramatically as a result and the Euroland economies have been devastated and weakened ever since." (Emphases added)
In other words, China and Russia are not stopping with international clearing, but rather, intend to put into place an entirely independent system of international credit rating to challenge the West's monopoly here as well. And finally, you'll note the concluding paragraph: the Greek crisis was - at least in the view of East Asia if not Russia as well - full scale American economic warfare against Europe and the euro, and that means, like it or not, that it was full scale economic warfare against the locomotive of Europe, Germany.
Small wonder then, that the German defense minister, Ursula von-der Was-ist-Irhe-Name, recently informed the rest of NATO that Germany would be unlikely to be able to meet any NATO contingencies or emergencies. That bit of news, coupled with this interesting bit of analysis, means that the midnight oil is probably burning in Berlin over these announcements.
So here's the high octane speculation of the day: over the long term, as Germany continues to walk that typically German diplomatic tightrope, juggling and balancing East-West interests, one might expect, I imagine, for that country to begin quiet talks and negotiations to be able to participate in some capacity in those parallel systems of international clearing and credit rating. Time, of course, will tell, but it's one to watch closely.
See you on the flip side...