CHINA, GEOPOLITICS, AND DEBT CANCELLATIONAugust 13, 2017
Over the past few years we've seen the emergence of the BRICSA bloc (Brazil, Russia, India, China, and South Africa) rise to challenge the the global hegemony of the Anglosphere and the western financial system. It has not been met idly: former Brazilian President Dilma Rousseff, who brought her country into the BRICSA bloc, was overturned in that country by what amounts to a Brazilian Senate-led coup d'etat alleging corruption charges against her administration; Argentina, which under former President Fernandez de Kircher looked like it might join the alliance, elected a much more pro-western president; India and China are currently squaring off (again) over disputed territories along their borders. There are definitely cracks in the mortar of the BRICS.
But despite the pushback from the West, China (and Russia) have forged ahead with their plans for development of the new "silk road" project of China. Russia and China have both recently inked deals pledging to develop a very northern (read Arctic) version of the road, by-passing the troubled central Asian and Middle Eastern regions. Both nations know, however, that the shift to land-based transport of most of the world's trade is subject to interdiction from space, and equally, that in order to make their plans work, they have to have a secure system of international financial clearing, which again, will require a dramatic expansion of their space assets, and China has made it abundantly clear that it understands these implications of its plans. The USA knows all of this too, and hence, has moved in recent years to create space-based branches and command structures in its military.
But this article shared by Ms. S.H. indicates that there may be a new game looming in the geopolitical contest: one of debt cancellation (copy and paste in your browser):
Something caught my eye here, and I imagine it caught yours as well:
On Saturday, Chinese President Xi Jinping made yet another commitment to help economic growth in the developing world, announcing that China would be canceling the debts of the world’s least developed countries.
President Xi made the announcement while addressing a United Nations summit on global development goals. During his speech, he also pledged to establish a $2 billion fund dedicated to improving conditions in the most impoverished countries around the world.(Emphasis added)
Beyond this, were not given much by way of specifics on how China intends to "cancel the debt of developing nations", so we're left to our usual "high octane speculation" devices.
For many decades the game of the West, and especially of the American Empire, has been to use a variety of institutions like the IMF to make loans to "developing nations" that the loan originators and guarantors know that these nations will not be able to repay. When the inevitable default comes, the terms are "renegotiated", which usually includes the basing of American military, and special perks for American and western corporations, including the seizure of certain specific assets of the country. In effect, the country and its assets becomes the collateral securing these "loans." It's a game well-spelled out by John Perkins in his book Confessions of an Economic Hit Man.
So one may speculate that Mr. Xi's announcement is simply China signalling the fact that it intends to play the same game.
But that would be only one possible reading, and, for the West, the least problematical. It does, nevertheless, have some supporting evidence, since China has lobbied hard to get the yuan/reminbi to be accepted in the Special Drawing Rights (SDR) basket of currencies, and has pushed for, and achieved, the sale of bonds on European bourses - Frankfurt for example - denominated in reminbi.
There is, however, a more disturbing possibility, and herewith, my very high octane speculation of the day. China, as is well-known, has a great deal of US soveriegn securities on its books, as it also has a ready supply of US dollars. For years - decades really, if one wants to get right down to it - the speculation has occasionally been aired that China could, if it chose, suddenly dump all those dollars and securities. Enter Mr. Xi's statement: what if it did so in the guise of paying off Country X's dollar-denominated debt? Such actions would achieve the nightmare scenario many have talked about over the years, but do so in a way to China's economic and geopolitical advantage, rendering countries that have been sucked dry by the Western financial "hit men" into allies. It would be a clever way to restore those countries' ratings, send the "economic hit men packing," and opening the doors to Chinese investment.
Just a thought.
See you on the flip side...