There's interesting news in the realm of international finance, and this bit of news was shared with us by a regular reader here, Mr. E.O. Yesterday, China and India sponsored the official launch of an East Asia development bank:
The news here is straight forward enough, as are the motivations behind China and India - two major players within the BRICSA bloc of Brazil, Russia, India, China, and South Africa - for China and India the formation of the bank basically amounts to a protest over the structure of other such banks, with the USA and Japan being heavily weighted:
"China and other emerging economies, including BRICS, have long protested against their limited voice at other multilateral development banks, including the World Bank, International Monetary Fund and Asian Development Bank.
"China is grouped in the ‘Category II’ voting bloc at the World Bank while at the Asian Development Bank, China with a 5.5 per cent share is far outdone by America’s 15.7 per cent and Japan’s 15.6 per cent share."
And of course, the USA and its East Asian satraps, South Korea, Japan, Indonesia, and Australia, are sitting this one out because they have "concerns":
US allies Japan and Australia alongwith South Korea and Indonesia are notable absentees from the list of nations who signed up for the China-led Bank. The AIIB will extend China’s financial reach and compete not only with the World Bank, but also with the Asian Development Bank, which is heavily dominated by Japan.
All this is predictable enough, and indeed, on this website we've long been predicting such moves by the BRICSA bloc nations to establish parallel institutions and international financial clearing to rival the West's. Of these two pillars - parallel institutions such as development banks, and parallel international financial clearing - the former, parallel development banks, are much easier to accomplish than parallel international clearing, which will demand a dramatic increase of those nations' space-based communications systems. It's worth reminding ourselves again, amid all the hysteria about financial collapse and so on, that reserve currency status is always associated with naval power, and in today's modern world, that translates into space power and space-based assets. When one looks at the preponderance of American space-based communications, it is clear the BRICSA bloc is a long way from achieving near parity, and that's not factoring in the space assets of the U.K., France, Germany, Japan, and so on.
So what might the possible picture be? is there possibly a pattern emerging here? While it is too early to tell, I suspect we might be looking at an emerging BRICSA bloc strategy, which will consist of the establishment of regional development banks within the bloc - say between China and Brazil and/or Argentina - just as we see this particular bank being sponsored by the "Big Two" of east Asia, China and India, who appear willing to bury old hatchets to accomplish common regional goals. This in turn can fund, via "infrastructure development," the establishment of ground-based regional clearing systems, a step needed in any case to ensure redundant communications in a system where the ultimate goal is space-based clearing. So the pattern might be this: (1) regional development banks;(2) regional ground-based clearing infrastructure and redundancy, leading ultimately to (3) space-based and genuinely global parallel international financial clearing. Time alone will tell.
See you on the flip side...