The Coming of BRICS+ Decentralized Monetary Ecosystem
• 1,400 WORDS •
Get ready for what may well be the geoeconomic bombshell of 2024: the coming of a decentralized monetary ecosystem.
Welcome to The Unit – a concept that has already been discussed by the financial services and investments working group set up by the BRICS+ Business Council and has a serious shot at becoming official BRICS+ policy as early as in 2025.
According to Alexey Subbotin, founder of Arkhangelsk Capital Management and one of the Unit’s conceptualizers, this is a new problem-solving system that addresses the key geoeconomic issue of these troubled times: a global crisis of trust.
He knows all about it first-hand: a seasoned financial professional with experience in investment banking, asset management and corporate matters, Subbotin leads the Unit project under the auspices of IRIAS, an international intergovernmental organization set up in 1976 in accordance with the UN statute.
The Global Majority has had enough of the centrally controlled monetary framework put in place 80 years ago in Bretton Woods and its endemic flaws: chronic deficits fueling irresponsible military spending; speculative bubbles; politically motivated sanctions and secondary sanctions; abuse of settlement and payment infrastructure; protectionism; and the lack of fair arbitration.
In contrast, the Unit proposes a reliable, quick and economically efficient solution for cross-border payments. The – transactional – Unit is a game-changer as a new form of international currency that can be issued in a de-centralized way, and then recognized and regulated at national level.
The Unit offers a unique solution for bottlenecks in global financial infrastructure: it is eligible for traditional banking operations as well as for the newest forms of digital banking.
The Unit can also help to upend unfair pricing in commodity trading, by means of setting up a new – fair and efficient – Eurasian Mercantile Exchange where trading and settlement can be done in a new currency bridging trade flows and capital, thus paving the way to the development of new financial products for foreign direct investment (FDI).
The strength of the Unit, conceptually, is to remove direct dependency on the currency of other nations, and to offer especially to the Global Majority a new form of apolitical money – with huge potential for anchoring fair trade and investments.
It is indeed a new concept in terms of an international currency – anchored in gold (40%) and BRICS+ currencies (60%). It is neither crypto nor stablecoin – as it’s shown here.
The Beauty of Going Fractal
The Global Majority will instantly grasp the primary purpose of the Unit: to harmonize trade and financial flows by keeping them outside of political pressure or “rules” that can be twisted at will. The inevitable consequence translates as financial sovereignty. What matters in the whole process are independent monetary policies focused on economic growth.
That’s the key appeal for the Global Majority: a full ecosystem offering independent, complementary monetary infrastructure. And that surely can be extended to willing Unit partners in the collective West.
Now to the practical level: as Subbotin explains, the Unit ecosystem may be easily scalable because it comes from a fractal architecture supported by simple rules. New Unit nodes can be set up by either sovereign or private agents, following a detailed rule-book in custody of the UN-chartered IRIAS.
This means that connection is available to all open DEX and digital platforms operated by both commercial and Central Banks around the world.
The endgame is that everyone, essentially, may use the Unit for accounting, bookkeeping, pricing, settling, paying, saving and investing.
No wonder the institutional possibilities are quite enticing – as the Unit can be used for accounting and settlement for BRICS+; payment and pricing for the Eurasian Economic Union (EAEU); or as a reserve currency for Sub-Saharan Africa.
And now comes the clincher: the Unit has already received backing by the BRICS Business Council and is on the agenda at the crucial ministerial meeting in Russia next month, which will work out the road map for the summit next October in Kazan.
That means the Unit has all it takes to be on the table as a serious subject discussed by BRICS+ and eventually be adopted as early as in 2025.
Will Musk and the NDB Be on Board?
As it stands, the priority for the Unit conceptualizers – whom I followed for over a year during several, detailed meetings in Moscow – is to inform the general public about the new system.
The Unit team is not interested at all in getting straight into political hot waters or to be cornered by ideologically-laden arguments. Direct references to inspiring but sometimes controversial concepts or authors like Zoltan Pozsar may bury the Unit concept into pigeon holes, thus limiting its potential impact.
What may lie ahead could be extraordinarily exciting, as the Unit appeal could extend all the way from Elon Musk to the BRICS’s New Development Bank (NDB), hopefully engaging an array of crucial actors. After a positive evaluation by Finance Minister Anton Siluanov – who remains on the post in the new Russian government – it’s not far-fetched to imagine Putin and Xi discussing it face to face this week in Beijing.
As it stands, the major takeaway is that the Unit should be seen as a feasible, technical solution for the theoretically Unsolvable: a globally-recognized payment/trade system, immune to political pressure. It’s the only game in town – there are no others.
Meanwhile, the Unit conceptualizers are open for constructive criticism and all manners of collaboration. Yet sooner or later the battle ranks will be lined up – and then it will be a matter of seriously upping the game.
“Academically Sound, Technologically Innovative”
Vasily Zhabykin, co-author of the Unit white paper and founder of CFA.Center, Unit’s technological partner at Skolkovo Innovation Hub in Moscow, crucially stresses: the Unit “represents apolitical money and can be the connector between the Global South and the West.”
He’s keen to point out that “the Unit can keep all the wheels turning unlike most of the other concepts that feature ‘dollar killers’, etc. We do not want to harm anybody. Our goal is to improve efficiency of currently broken capital and money flows. The Unit is rather the ‘cure for centralized cancer’’’.
Subbotin and the Unit team “are keen to meet new partners who share our approach and are ready to bring additional value to our project.” If that’s the case, they should “send us 3 bullet points on how can they help and improve the Unit.”
A bold follow-up step should be, for instance, a virtual conference on the Unit, featuring leading Russian economist Sergey Glazyev, Yannis Varoufakis, Jeffrey Sachs and Michael Hudson, among others.
“I have been following the development of Unit for more than a year and can confirm that Unit offers a very timely, feasible solution. It is academically sound, technologically innovative and at the same time complementary to the existing banking infrastructure.
Launching it under the auspices of an UN institution gives Unit legitimacy, which the current Bretton Woods framework is clearly lacking. Recent actions by the US administration and loud silence from IMF clearly indicate the need for change.
A decentralized approach to emission of potential global trade currency, whose intrinsic value is anchored in physical gold and BRICS+ currencies, makes Unit the most promising of several approaches being considered. It balances political priorities of all participants, while helping each sovereign economy develop along its optimal path.
The New Development Bank (NDB) and BRICS+ shall embrace the concept of Unit and help it to become the pinnacle of the new emerging global financial infrastructure, free from malign political interferences while focused instead on fair trade and sustainable economic growth.”
A clear, practical example of possible Unit problem-solving concerns Russia-Iran trade relations. These are two top BRICS members. Russian trade with Iran is unprofitable due to sanctions – and both cannot make payments in US dollars or euros.
Russian companies suffer significant losses after switching to payments in national currencies. With each transfer, Russian businesses on average lose as much as 25% due to the discrepancy between the market rate in Iran and the state rate.
And here’s the key takeaway: BRICS+ as well as the Global Majority can only be strengthened by developing closer geoeconomics ties. The removal of Western speculative capital shall free up local commodity trading, and enable the pooling of investable capital for sustainable development. To unlock such a vast potential, the Unit may well be the key.
The U.S.’ growing urgency in ‘containing’ China’s development was thrown in sharp relief this week as Janet Yellen arrived in Beijing for what turned out to be an execrable beggar’s tour. Just days prior to her arrival, she had buzzed the punditry with her historically memorable exclamation that China was now operating at “overcapacity”(!!).
What is overcapacity, you ask? It’s a new word for me, too—so let’s consult the dictionary together:
overcapacity noun o·ver·ca·pac·i·ty: ō′vər-kə-ˈpa-sə-tē 1: When an insolent upstart nation’s surging economic activity totally humiliates the reigning hegemon’s own faltering economy, causing the many expensive dentures and porcelain veneers of the ruling class gerontocracy to rattle and grate with moral outrage and jealousy.
1b: An undesirable situation causing Janet Yellen and Nancy Pelosi’s stock portfolio to droop like a pair of botox-sapped jowls.
Granted…my dictionary might be slightly different to yours, I have a rare edition. That said, are we on the same page? Good.
The above definition may be missing in the new official regime argot pamphlet, but it’s safe to say the inept leaders of the U.S. are down to making up creative new euphemisms for describing China’s total undressing and upending of the economic order.
But if you were skeptical about the meaning behind Yellen’s risible “overcapacity” solecism, her speech from inside of China confirms precisely what’s on the regime’s mind:
“China is now simply too large for the rest of the world to absorb this enormous capacity. Actions taken by the PRC today can shift world prices….”
And the bombshell:
“When the global market is flooded with cheap Chinese goods, the viability of American firms is put into question.”
Well, I’ll say.
The important distinction to note in the above statement is that for a long time the ‘cheap’ moniker used to describe Chinese goods often underhandedly referred to their quality, in the secondary definitional sense. Here, Yellen is referring to cheap as in price: the distinction is significant because it’s referential to the fact that Chinese manufacturing processes have simply far exceeded the efficiency in the West, as recently highlighted by videos of the Xiaomi e-car factory with its own native Giga Press that’s claimed to be able to pump out a car every 17 seconds.
The fact of the matter is, China is simply leaping ahead of the decrepit, deteriorating U.S. by every measure and the panicked elites have sent Yellen to beg China to “slow down” and not embarrass them on the world stage.
How is China doing this? Let’s run through a few of the most poignant ways:
[1]
First and foremost, it’s become almost a passe bromide to observe: “The U.S. funds wars, while China funds development.” But it really is true. Think about this for a moment:
The above is factual: Esquire reported that a Brown University investigation found the U.S. has spent an ineffable $14T on wars since 9/11:
And yes, the current U.S. debt is a massive $34T. That means quite literally almost half of the entire current U.S. debt was blown on endless, mindless, genocidal wars in the Middle East.
The U.S. has wasted its entire blood and treasure on war. Imagine what the U.S. could have built with $14 trillion dollars? Where the U.S. could have been in relation to China for that amount? As someone else noted, the U.S. could have very well built its own “one belt and road” project for that money, connecting the world and reaping untold benefits.
China hasn’t spent a cent on war, and puts everything right back into economic development and wellbeing for its own people.
China is winning lion’s share of construction projects in Africa
Chinese companies accounted for 31% of African infrastructure contracts valued at US$50 million or more in 2022, compared with 12% for Western firms, according to a new study.
It is worth to be noted that in the 1990s, about eight out of 10 contracts to build infrastructure in Africa were won by Western companies.
The illustrative statistics for this are endless:
What makes this historic malappropriation of American funds most tragic is that none of it came at the benefit of American people. The entire operation was carried out by an ethnic cabal within the U.S. government with loyalties only to Israel, and no one else. I’m speaking of course of the PNAC clan, who masterminded the entire breadth of the 21st century wars which have engulfed America in wretched shame and misery, irreversibly gutting the country and squandering its global standing. These wars had nothing whatsoever to do with America’s national interests or security, and have done naught but make Americans less safe and the entire world more dangerous and unstable.
China doesn’t have this problem: there is no inimical ‘out’ group parasitizing their country’s leadership, literally assassinating (JFK) and blackmailing their presidents (Clinton). China is therefore able to focus on the interests of its own people.
And yes, for those wondering, it’s now fairly proven that Lewinsky was a Mossad honeytrap used to blackmail Clinton in assenting to various Israeli demands vis-a-vis the Oslo Accords, Wye River Memorandum, etc.
The fact is, Israel is a destructive parasite sucking the lifeblood out of America, causing the host to wage unnecessary wars on its behalf which have utterly removed every advantageous and competitive edge the country might have had over its Chinese ‘rival’.
[2]
As a corollary of the above, beyond just the simple kinetic nature of the profligately wasteful wars, America wastes an exorbitant amount of money just on maintenance and upkeep of its global hegemony. The reason is, it costs a lot of ‘enforcement’ money to strongarm vassals who hate you into compliance.
China doesn’t form vassals, it forms partners. That means it spends comparatively far less spreading its influence because that influence has compounding abilities owing to the fair bilateral nature of China’s arrangements. The U.S. has to spend comparatively inordinate amounts of blood and treasure to maintain the same level of ‘influence’ because that ‘influence’ is totally artificial, confected out of a poisonous mixture of fear, strong-arming tactics, economic terrorism that leads to blowback which hurts the U.S. economy, etc. In short, it is mafia tactics versus real business partnerships.
One big difference between China and the U.S. is that China is open to sharing the earth, willing to co-prosper with the U.S. Conversely, the U.S. is unwilling to abdicate its global domination:
The above was highlighted by Graham Allison, coiner of the Thucydides Trap idiom in relation to U.S./China. The Thucydides Trap, as some may know, describes a situation where an emerging power begins to displace the incumbent global power, and how historically this almost always leads to major war. To popularize the theory apropos U.S./China, Graham Allison used the historical example of the Peloponnesian war, where a cagey Sparta was forced to take on the rising power of Athens.
Allison was recently invited by President Xi to a forum for U.S. business leaders where Xi told him directly:
Contrast President Xi’s magnanimous statements with those of the seething, guilt-wracked, bloodthirstily conniving Western ‘executives’. In fact, Xi called for more exchanges between China and the U.S. in order to entwine the two countries in mutual understanding, to avoid the Thucydides Trap:
This is the enduring image of what global leadership truly looks like, and the principles it embodies.
Meanwhile, when one thinks of America’s progressive decline, the one enduring image that comes to mind is of a bitterly frightened but dangerous, beady-eyed cornered rodent, conspiring on how to inflict damage and suffering onto the world in order to mask its own downfall.
[3]
The U.S. government does a grave disservice to its own development by cooking all of its economic books. Every country does it at times to some degree—and going by U.S.’ notoriously frequent accusations of China in this regard, one would think China to be the most flagrant violator—but in fact, no one does this more than the current U.S. regime.
The recent “jobs” report touted as a major victory by the Biden administration was a disgraceful travesty. The admin touted major jobs figures:
But it turned out every job was either part time, a federal job, or went to illegals:
In reality, the U.S. economy is in atrocious shape with sky-high inflation.
“The Fed chair just confessed that #Bidenomics is just a migrant job fair. There is actually a million less American citizens working today than there were in 2020.”
Biden created 5 million migrant jobs! So don’t be fooled by his propaganda that’s spewed by the liberal machine. YOU DONT MATTER!
The data is cooked even more when comparing to China’s economic situation. As the following Tweeter explains:
While Chinese INCOMES are below American INCOMES, Chinese have much higher NET WORTH than Americans. How? They own apartments at a much higher rate and with a lot more equity than Americans. The MEAN and MEDIAN insight is even more beautiful. This graphic here is pretty much the only thing you need to understand about the difference between the economies of China and United States. But you really need to understand it and you need to have a deep understanding of what it means.
The above naturally springs the question of how China is able to do these things while the U.S. cannot. One of the answers comes by way of this fascinating explainer which shows that, contrary to the West’s depiction of China as some kind of rigidly authoritarian system, forward-looking President Xi is actually utilizing very cutting edge economic experimentation models to keep the Chinese economy as innovative, limber, and supple as possible.
In short, a deep study of thousands of official documents shows a huge upswing in language promoting economic experimentation in the directives issued under Xi’s government.
This is further compounded by the most important point of all: that under President Xi, China has embarked on a meticulous plan of curbing financialization and speculation of the ‘Western model’ in its economy. This is where it starts getting important so buckle up.
The article gives a brief history of financialization, from the Genoese bankers to modern times, observing the historical cycles that have precipitated America’s current deterioration:
Observers of the current American hegemony will recognize the transformation of the global system to suit American interests. The maintenance of an ideologically charged ‘rules-based’ order – ostensibly for the benefit of everyone – fits neatly into the category of conflation of national and international interests. Meanwhile, the previous hegemon, the British, had their own version that incorporated both free-trade policies and a matching ideology that emphasized the wealth of nations over national sovereignty.
In describing the cycle of financialization and its connection to the death of empires, the article notes about Britain:
For example, the incumbent hegemon at the time, Great Britain, was the country hardest hit by the so-called Long Depression of 1873-1896, a prolonged period of malaise that saw Britain’s industrial growth decelerate and its economic standing diminished. Arrighi identifies this as the ‘signal crisis’ – the point in the cycle where productive vigor is lost and financialization sets in.
And yet, as Arrighi quotes David Landes’ 1969 book ‘The Unbound Prometheus,’ “as if by magic, the wheel turned.” In the last years of the century, business suddenly improved and profits rose. “Confidence returned—not the spotty, evanescent confidence of the brief booms that had punctuated the gloom of the preceding decades, but a general euphoria such as had not prevailed since…the early 1870s….In all of western Europe, these years live on in memory as the good old days—the Edwardian era, la belle époque.” Everything seemed right again.
However, there is nothing magical about the sudden restoration of profits, Arrighi explains. What happened is that “as its industrial supremacy waned, its finance triumphed and its services as shipper, trader, insurance broker and intermediary in the world’s system of payments became more indispensable than ever.”
In short: as an empire dies, loses its industrial and manufacturing capacity, finance takes over, pumping up huge bubbles of phony speculative money that gives the brief appearance of economic prosperity—for a time. This is what’s currently happening in the U.S., as it drowns in its self-created agony of debt, misery, corruption, and global destabilization.
One thing to note—if you’ll allow me this not-so-brief aside—is that the entire Western system is based on the actual institutionalized economic sabotage and subversion of the developing world. Books like the following go into some of it:
The rise of the underground economy: The book reveals how the United States’ underground economy evolved parallel to its legitimate economy, exploiting loopholes and leveraging secrecy jurisdictions to facilitate illegal activities such as drug trafficking, arms smuggling, and money laundering.
The “dark” side of globalization: Mills challenges the prevailing narrative of globalization as a force for progress, highlighting how it has facilitated the expansion of illicit networks across borders and allowed criminal enterprises to flourish.
The complicity of financial institutions: The author examines the role played by major financial institutions in enabling money laundering and illicit transactions. He underlines the need for stronger regulations and accountability to prevent banks from becoming facilitators of underground activities.
I challenge you to read notes on the National Memorandum 200, if you haven’t heard of it before:
Incidentally, John Michael Greer just penned a new column (thanks to whoever shouted out this blog in the comments!) about the neologism he coined: Lenocracy, which derives from the Latin “leno” for pimp; i.e. a government run by pimps, or pimpocracy.
His definition of pimps in this case is that of middlemen who are the classic rent-seeking leaches—or rentier class—which extract economic rent without adding any value to the economy—all Michael Hudson territory, for those in the know.
Bear with me, I promise this will all tie together into an overall picture of China.
JMG characterizes the ‘pimps’ as basically all the unelected, bureaucratic, red-tape-weaving, blood-sucking monetary vultures killing growth and livelihoods by each taking their nibbles in turn from the carcass of the working class, exacting some small transactional charge at every step of routine business in Western nations, particularly the U.S. This has served to suffocate the average small business or entrepreneurship in general, not counting the big ticket venture capitalists who are mostly offshoots of global financial and investment firms. This is part and parcel to the lethal ‘financialization’ of the country that has spelled doom for its future.
Now, getting back to Thomas Hon Wing Polin’s precis, and how it relates to this. He notes:
It is noteworthy that the CPC leadership recently launched a major drive to build China into a “financial great power,” with a financial system “based on the real economy.” That would be the antithesis to Anglo-American-style economic financialization.
Read that last part: “…set pure profit-making aside.”
Pay attention to this big kicker:
Beijing is powering ahead with the epic project.
“China’s 461-trillion-yuan (US$63.7 trillion) financial industry and its regulatory regime will be heavily prioritised in a broad economic reshuffle engendered by the country’s top leadership, with the sector remoulded to serve national objectives like sustainable growth and advancement in the global tech race.
Are you beginning to get it yet? If not, here’s the crowning finial:
Specifically, it vowed to rein in Wall Street-style practices seen as unsustainable and crisis-prone, and move toward functionality as an overriding value for the financial system rather than profitability.
It also mandated that Chinese financial institutions have “higher efficiency” than their peers in the capitalist world and provide inclusive, accessible services in the pursuit of common prosperity.
“Like it or not, banks and other institutions on the supply side should expect top-down directives and overhauls cued by the CFC,” said Zhu Tian, a professor with the China Europe International Business School (CEIBS).
And there it is. In essence: China is creating a revolution, striking out a new path of finance which steers away from the wild excesses of the West into a bold new direction. Finance to benefit the real economy, the common man, the people. This is what the fig leaf of Rothschild-pushed ‘stakeholder capitalism’ is meant to be, or better yet: pretends to be.
It’s hard not to wax poetic on these developments, because they are truly groundbreaking. China is paving a new path forward for the entire world. The Chinese banking industry is now by far the largest on earth and President Xi has wisely put his foot down with a bold edict: we will not follow the path of destruction chosen by the West, but rather will set our own new path.
This is an iconoclastic, paradigm-breaking revolution which ends six centuries of Old Nobility world finance dominion, traced from the Spanish-Crown-allied Genoese bankers, to the Dutch then English banking system which now continues to enslave the world, and is referred to by a variety of names in the dissident sphere: from Hydra, to Leviathan, to Cthulu, to simply: the Cabal.
All those 600 years are going up in smoke with China’s repudiation of the ‘old standards’, which privilege predatory, deceptive, extractive terms and practices meant to benefit only the Old Nobility elite class. China’s system is true stakeholder finance: the government will forcibly bend the bankers to its will, making sure that finance serves the common good and the people first, rather than speculation, financialization, capitalization, and all the other wicked inventions of the Western Old Nobility class.
It begins like so:
“…bringing greed is good era to an end.”
The big one:
“Government has called for banks to abandon a Western-style ethos and adopt an outlook in line with broader economic priorities.”
It’s a revolution in the making.
But if you’re thinking my dramatic flights above verge a touch on hyperbole or idealism, you could be right. I, of course, still proceed with caution; we can’t be sure that China will succeed in its grand demolishment of the age-old paradigm. But all signals point to early success thus far, and more importantly, it’s clear that China has a leader that fundamentally understands these things at the most rooted level. Western leaders not only are incapable of even grasping the complexities involved of reining in capital, they are unable to do so for the mere fact that they’re totally bought and paid for by the representatives of that very capital class. The cabal of Capital is so deeply and institutionally entrenched in Western governmental systems that it’s simply impossible to imagine them being able to see ‘the forest for the trees’ from within the forest itself.
By the way, in light of the above, here’s the West’s truly desperate, pathetically envious, face-saving attempt to tarnish and mischaracterize China’s new direction:
The above is particularly astounding in its admissions. Read carefully:
Market-based US and European economies are struggling to survive against China’s “very effective” alternative economic model, a top US trade representative has warned, according to Euractiv.
Katherine Tai told a briefing in Brussels on Thursday that Beijing’s “non-market” policies will cause severe economic and political damage, unless they are tackled through appropriate “countermeasures.” Tai’s remarks came as the EU-US Trade and Technology Council (TTC) kicked off in Leuven, Belgium.
“I think what we see in terms of the challenge that we have from China is… the ability for our firms to be able to survive in competition with a very effective economic system,” Tai said in response to a question from Euractiv.
In short: China isn’t playing fair—they’re actually privileging their people and economy over financial speculation, and this is causing their firms to outcompete ours!
But what she’s really talking about gets to the essence of the difference in the two systems:
The trade official described China as a system “that we’ve articulated as being not market-based, as being fundamentally nurtured differently, against which a market-based system like ours is going to have trouble competing against and surviving.”
These are code words: what she means by “market based” is free market capitalism, while China uses more of a centrally-planned directive system, as outlined earlier. Recall just recently I posted complaints from Western officials that their companies are not able to compete with Russian defense manufacturers due to their ‘unfairly’ efficient ‘central planning’ style.
Here too, what they mean is that the Chinese government creates directives that spurn ‘market logics’ and are aimed at direct improvements to the lives of ordinary citizens. In the West there’s no such thing: all market decisions are based merely on the totally detached financial firms’ speculations and are exclusively at the behest of a tiny claque of finance and banking elite at the top of the pyramid.
You see, the U.S. is threatened because it knows it can never compete with China fairly, by squelching or containing its own gluttonous financial elite—so that leaves only one avenue for keeping up: sabotage and war.
This is the real reason the U.S. is desperate to stoke a Chinese invasion of Taiwan by various provocations, including weapons shipments. Just like the U.S. used Ukraine as the battering ram to bleed and weaken Russia economically, disconnecting it from Europe, U.S. hopes to use Taiwan as the Ukraine against China. It would love to foment a bloody war that would leave China battered and economically set back to give the failing and greed-suffocated U.S. economy some breathing room.
But it’s unlikely to work—China is too sagacious to take the bait and fall for the trap. It will patiently wait things out, allowing the U.S. to drown in its own endless poison and treachery.
No, there will be no Thucydides Trap—it’s already too late for that. The Trap worked for Sparta because it was still at its peak and able to thwart Athens. The U.S. is in terminal decline and would lose a war against China, which is why they hope to stage a proxy war instead, cowardly using Taiwan as the battering ram. But China can read these desperate motives with the clarity of finely glazed porcelain.
As the US Anglo-Zionist empire ramps up its war against China, an ancient archetype makes its cyclical appearance to offer guidance through “interesting times.” As per a brief Google search, the “Year of the Dragon” represents power, nobility, luck, and success. Up until now, China has demonstrated incredible humility and restraint in response to the outrageous insults and provocations of the US neocon government. Goodbye “Year of the Rabbit,” time for China to “show its pimp hand.”* (*Am. slang- display one’s power.)
First, warmest Year of the Dragon wishes to Emperor President Xi- Earthly Representative of the Tao, Monarch Butterfly Princess Meng Wanzhou, and the people of China.
Second, some readers might accuse me of betraying my “country” by siding with China. Nonsense. The US republic and its Constitution no longer exist. Both were subsumed by the US Anglo-Zionist Empire, a confederation of financial cartels, multinational corporations, oligarchs, the Military Industrial Complex, the Deep State, and the Zionist Lobby. Like all end-stage pathologically corrupt empires, reform is a lunatic’s dream. The best hope for its subjects is to avoid drowning in the sinking behemoth’s vortex. Perhaps the weary survivors who find space on lifeboats or cling to floating wreckage can regroup to form a beautiful ideological-ethno state republic that embraces win-win cooperation as primary global influencer China torchlights humanity’s path to Star Trek Kardashev Level II Civilization.
China’s position has always been- “don’t start none, won’t be none.”* (*A self-defense postulate that advocates conflict avoidance yet acknowledges the right to hit back when attacked). Based on the actions of the US and its vassals, China needs to prepare for continued escalations of aggression. To take creative license with a Socrates attributed saying- “Know thy enemy.”
The Anglo-Zionist war trident contains three sharp points- “extreme war,” “conventional war,” and “economic war.” Sometimes the trident’s prong applications overlap and merge. An example of an overlap-merge application is cyberwarfare.
“Extreme war” primarily entails nuclear and biological warfare. It is extreme because its applications hold the potential to spread beyond the battlefield to take down human civilization.
America uses nuclear weapons as a threat deterrent. In this case, “threat” is a relative term. The US dollar should not say, “In God We Trust,” but rather “In Nukes We Trust,” because its nuclear and military arsenal keep the dollar afloat via dollar hegemony enforcement. As the insanity and idiocy associated with dying empire intensifies and the dollar slips, expect dangerous acts of desperation, e.g. use of tactical battlefield mini-nukes, biological weapon attacks.
As to the US nuclear threat, from my viewpoint, the correct deterrent for China is what I call the “skin in the game”* approach.” (*when the policies or actions of an individual or entity expose them to the same risk or loss as everyone else). The West’s 1% and rootless .01% ruling classes are parasitic leeches and more importantly, cowards. While they may condemn millions or billions to death with little regard, they will do anything to cling to their wretched earthly existences. Chinese intelligence must locate all their bunkers and underground cities and make it known that in the event of nuclear war, China will relentlessly and repeatedly strike their high strata-class rat holes with the strongest bunker-busting nukes available.
With biological war, while an appropriate response is warranted, unless it comes down to a case of revenge killing your enemy before dying, I advise against biological tit-for-tat. Biological weapons can mutate and go global. Barring accidental or insane rogue scientist release, the US is limited in the lethality of its bio-attacks, as super-powerful pathogens could easily turn on their creators. If Chinese intelligence confirms that COVID-19 was a bio-attack, which I suspect it has, then China should publically announce its findings. It’s the “Year of the Dragon.” Expose the motherfuckers.* (*Someone who copulates with their mother or a generic term for a person(s). In this case, both meanings could apply.)
I won’t dwell on “conventional war” strategy because China wins.
Regarding “economic war.” Wall Street outsourced US manufacturing to China to turn America into a usury-based F.I.R.E. (finance, insurance, real estate) economy that sells debt, with the expectation that China would buy that debt and let Wall Street insiders manage China’s economy. This economic model was known as “Chimerica.” While China initially benefited from the arrangement, it rejected the part where a rootless Wall Street class takes over China’s 5000-year-old civilization after they suck the US drier than a mummy’s 陰戶.
US economic numbers are built on fraud. The wildly inflated $65,000 hospital emergency room bill counts toward American GDP. The US stock market stays afloat through Federal Reserve intravenous feeding, stock buybacks, and other forms of corporate welfare and chicanery. Military Industrial Complex profits rely on the captive printing press treasuries of the US and its vassals. It’s a giant scam bubble waiting for the inevitable pin. BRICS is a good start to withstanding the “pop” and also offers an alternative to US economic bullying, debt slavery, and asset seizure. Although, from my viewpoint, China’s best defense is autarky that coexists with global trade.
China’s BRI is a mind-blowing accomplishment. However, as any sandcastle can attest, it’s easier to destroy than create. America’s pretty good at kicking down sandcastles.
The CIA stymied Germany’s energy flow with the destruction of the Nord Stream 2 pipeline. If the homemade missiles of Houthi freedom fighters can disrupt a major shipping route, imagine what the subs and destroyers of the US or its vassals can achieve. Global infrastructure projects are susceptible to sabotage or attack from CIA-funded terrorist groups. In the event of a major trade shutdown, China must be able to provide all life requirements to its population. I believe it can do that. The weak link is energy. China’s Artificial Sun cold fusion reactor offers a possible solution. I recommend China invest the same ratio of manpower, money, and brain-battery into cold fusion reactors as the US put into its WW2 Manhattan Project. Post-US Empire collapse, Chinese space tankers can fill their hulls from the liquid methane sea of Titan, Saturn’s moon. The current Petroleum Civilization model is unsustainable and is destroying the ecosystems that sustain life on Earth.
Just like China transformed Marxist economics into “socialism with Chinese characteristics,” when the right time comes, I recommend the same evolutionary approach toward globalization. From an energy conservation standpoint, it is illogical for a nation to grow a bunch of carrots for a cost of one dollar and then ship them around the world to buy back the same carrots for three dollars. Or export the carrots only to buy another country’s carrots. While globalization has profited China, at some point it will create negative blowback if the system’s internal defects are not addressed and corrected. Nigeria can produce its own food and textiles. What it cannot do, at least at this juncture, is build a high-speed rail system. Neither can the US.
For decades Hollywood (US cinema/music) conquered the world’s hearts and minds. To quote George Orwell- “All art is propaganda.” One reason the American Empire is dying is because Hollywood can no longer make good movies. They can’t sell the dream. China needs to fill that entertainment void. The shortcut path is simple replication of the movies/music currently mass-produced by Western entertainment corporations using AI/machine learning programs. The longer, but from my viewpoint, more fruitful path, is for China to set up an institute to study American (and Western) cultural entertainment (cinema, music, novels) from the years 1945-1999. While the institute’s technicians will wade through much detritus, they’ll also discover gems that can birth beautiful children.
Outside of religious conflict, spirituality is seldom discussed in the geopolitical arena. Mistake. During the Cold War, the Rothschild-Rockefeller bank cartel set up a system whereby a nationalist revolutionary leader had to choose either colonialist resource-theft capitalism or atheistic materialistic* Marxism. (*materialism not as in capitalist hyper-consumerism, but rather the Marxist belief that humans are biological machines devoid of divine spark, and can be programmed and managed in a purely mechanical capacity). The opposing capitalist and Marxist programs worked as balancing forces within the context of international finance’s world domination program, maintaining the status quo of banker rule. Chairman Mao chose Marxism, which history shows was the correct choice. If he had chosen colonialist resource theft capitalism, an independent Chinese nation-state would not exist today.
Once China broke the chains of Western imperialism it was free to chart its own course, and subsequently transformed Marxism into “socialism with Chinese characteristics” by filtering out the negative elements of Marxism while incorporating pragmatic aspects of capitalism. The atheistic component of Marxism put it at odds with China’s ancient spiritual technologies- Taoism, Buddhism, luck attraction, Chi theory, etc. STEM disciplines answer many things, but can’t sufficiently respond to: “What is this?” and “What is beyond this?” During the CPC’s atheist phase, some spiritual seekers became estranged from the government and that dissatisfaction was capitalized on by the CIA who partnered with disenfranchised religious groups for nefarious purposes. I believe the rift between China and most of these religious groups is repairable. Rapprochement would deal a painful blow to Western intelligence agencies. Better to convert an enemy than fight him.
Just like China transmogrified economic theory, I believe it can do the same thing with spiritual theory. Working in win-win cooperation with spiritual organizations from around the world, I envision China spearheading the development of spiritual technology compatible with Kardashev Level II Civilization. In the yin-yang circle, the science and spirituality compartments coexist in harmonious balance. May the Tao be with you.
In keeping with the Year of the Dragon, I need to address the unbearable arrest and detention of Monarch Butterfly Princess and Huawei CFO Meng Wanzhou. So what if Huawei did business with Iran? Why does the US get to dictate who a sovereign Chinese company transacts with? This US-Canadian false-arrest action insulted not just Meng Wanzhou, but the entire Chinese nation. Either the perpetrators issue a full apology or when the light turns green, don’t stop until it’s red.
Do you think the sociopathic and blackmailed Western CEO actors propped up by international bankers and managed by Deep State technocrats will ever speak on behalf of the frog, dolphin, and owl? Huawei with Meng Wanzhou’s influence holds the potential to build the blueprint for the technological-ecological harmonization advocated by scientist Buckminster Fuller in his book, “Operating Manual for Spaceship Earth.”
Wait a minute. Are you in love with her? Do you plan on showing up at Princess Wanzhou’s door with a bouquet of pretty flowers? Ha ha ha. Pathetic clown. She doesn’t know you exist. I’m actually embarrassed for you.
Hold on. Confession time friend. I’m a pathetic clown too. Is it so terrible to close one’s eyes for a moment to imagine what can never be?
As seen with the Moscow concert hall attack and CIA disruption operations in Maidan-Ukraine, Hong Kong, and Xinjiang- Western intelligence agencies love terrorism and color revolution. While China avoids terror-targeting civilians (a wise policy) and interfering in the domestic affairs of other nations (perhaps some revision), each provocation must receive the appropriate response. No more humiliation.
It stands to reason that CIA-Mossad will repeat a 9/11-style false flag to push the US public into anti-China war mode. China’s public relations and media teams must be ready to offer swift denial. On a global level, this will prove effective. However, due to hyper-capitalist irrational racism components in America’s founding and the universal mob-think outlined in Gustave Le Bon’s “Psychology of Crowds,” in a post-false flag environment, US Chinese ethnics (and mistaken identity Asians) would be at risk. During WW2 the US government threw US Japanese ethnics into concentration camps while the greedy mob grabbed their assets for pennies on the dollar. To address this possibility, I recommend China build an underground railroad* (US antebellum secret networks that helped Black slaves escape North) or assist in the creation of a warrior-monk based “Monarch Butterfly Princess Holy Order of the Tao.”
What of Taiwan? It’s the “Year of the Dragon.” Go as far as you can go China. Perhaps all the way.
And now a word for Dragon-skeptics.
Some claim that China is already under the control of the Rothschild-Rockefeller bank cartel (or planet owners) and East vs West is WEF kabuki theater. I disagree for the following reasons:
1- Techno-feudalism requires not only the cultural destruction of its subjects, but also their genetic alteration/destruction. All human DNA is considered the property of the owners and can therefore be used as a resource commodity and control mechanism. Under WEF protocol, China’s leaders would have to be willing to destroy their people’s 5000-year-old culture and DNA. I don’t see that happening. While some of China’s technological innovations play into state security (legit action, given CIA history), the tech is primarily used to improve the lives of China’s citizens- the exact opposite of US policy.
2- In its 5000-year history, China never pursued a policy of military invasion or conquest outside of its security/territorial sphere. China built a wall to keep the barbarians out.
3- China’s engagement with foreign nations is of a transactional nature. Unlike the West, they’ve never displayed a proclivity for stealing the DNA, culture, politics, assets, bodies, or souls of the people they do business with.
4- During the COVID-19 pandemic, China offered its citizens traditional vaccines. Although certain CPC officials (they always reveal themselves) pushed for Pfizer mRNA shipments and domestic mRNA vax production, the CPC as a whole rejected the mRNA pressure tactics of the US political class. While you may feel the CPC overreacted with the lockdowns, keep in mind that they faced an unprecedented bio-attack. For future occurrences, I recommend zinc, vitamin C & D, and the 5000-year-old Traditional Chinese Medicine cabinet.
5- For those who believe this is all a perfectly choreographed show, what harm is there in supporting China? NWO is already a fait accompli. If that’s the case, kick back with a bottle of Patrón and Mossberg 12 gauge, and wait for the AI killer drones to arrive.
From my viewpoint, China remains the primary bulwark against the US Anglo-Zionist Empire aggressors and their global financial mafia handlers. Given the terrible power of the international bankers, Emperor President Xi must juggle a complex mishmash of neutrals, allies, and adversaries to navigate China to victory, which by extension means human species survival. Based on my observation, he has upheld the basic tenets of Tao. Until I see evidence to the contrary, like Petula Clark sang in her version- “I will follow him.”
I look forward to watching China’s evolutionary path to national-actualization. As per Oswald Spengler, the “West” is done. Western genius took the world from horse and wagon to modern industrial society. While many amazing creations came from that, so did much suffering and death. If Western philosophy incorporates the principles of karmic law to form yin-yang balance and Europe joins China and Russia in a true Eurasian bloc, I believe Western rejuvenation and positive reintegration into the global family remain possible.
Prepare for takeoff China. Like Far East Movement said, “Now I’m feeling so fly. Like a G6.”
As Project Ukraine goes down the drain of history, Project Taiwan will go on overdrive. Forever Wars never die.
This is the Year of the Wooden Dragon, according to China’s classic wuxing (“five elements”) culture. The dragon, one of the 12 signs of the Chinese zodiac, is a symbol of power, nobility and intelligence. Wood adds growth, development and prosperity.
Call it a summary of where China is heading in 2024.
The second session of the 14th National Committee of the Chinese People’s Political Consultative Conference (CPPCC) was finalized on Sunday in Beijing.
The wider world should know that within the framework of grassroots democracy with Chinese characteristics, an extremely complex – and fascinating – phenomenon, the importance of the CPPCC is paramount.
The CPPCC channels wide-ranging expectations of the average Chinese to the decision level, and actually advises the central government on a vast range of issues – from everyday living to high-quality development strategies.
This year, most of the discussion focused on how to drive China’s modernization even faster. This being China, concepts – like flowers – were blooming all around the spectrum, such as “new quality productive forces, “deepening reform,” “high-standard opening-up,” and a fabulous new one, “major-country diplomacy with Chinese characteristics.”
As the Global Times emphasized, “2024 is not only a critical year for achieving the goals of the ‘14th Five-Year Plan’ but also a key year for achieving the transition to high-quality development of the economy.”
Betting on strategic investment
So let’s start with Chinese Premier Li Qiang’s first “work report” delivered a week ago, which opened the annual session of the National People’s Congress. The key takeaway: Beijing will be pursuing the same economic targets as in 2023. That translates as 5% annual growth.
Of course deflationary risks, a downturn in the real estate market and somewhat shaky business confidence simply won’t vanish. Li was quite realistic, emphasizing Beijing is “keenly aware” of the challenges ahead: “Achieving this year’s targets will not be easy.” And he added: “Global economic growth lacks steam and the regional hotspot issues keep erupting. This has made China’s external environment more complex, severe and uncertain.”
Beijing’s strategy remains focused on a “proactive fiscal policy and prudent monetary policy”. In a nutshell: the song remains the same. There won’t be a “stimulus” of any kind.
Deeper answers should be found in the work report/budget released by the National Development and Reform Commission: the focus will be on structural change, via extra funds to science, technology, education, national defense, agriculture. Translation: China bets on strategic investment, the key for a high-quality economic transition.
In practice, Beijing will be heavily invested in modernizing industry and developing “new quality productive forces” such as new-energy vehicles, biomanufacturing and commercial space flight.
Science Minister Yin Hejun made it clear: there was an 8.1% increase in national investment in research and development in 2023. He wants more – and he will get it: R&D spending will grow by 10% to a total of 370.8 billion yuan.
The mantra is “self-reliance”. On all fronts – from chipmaking to AI. A no holds barred tech war is on – and China is totally focused to counter “tech containment” from the Hegemon as much as its ultimate goal is to wrest tech supremacy from its prime competitor. Beijing simply cannot allow itself to be vulnerable to U.S.-imposed tech choke points and supply chain disruptions.
So short-term economic problems will not be causing sleepless nights. The Beijing leadership is always looking ahead – focusing on long-term challenges.
Learning lessons from the Donbass battlefield
Beijing will continue to steer the economic development of Hong Kong and Macau, and invest even more in the crucial Greater Bay Area, which is the premier southern China high tech, services and finance hub.
Taiwan of course was central to the work report; Beijing fiercely opposes “external interference” – code for Hegemon tactics. That will become even trickier in May, when William Lai Ching-te, who flirts with independence, becomes president.
On defense, there will be only a 7.2% increase in 2024, which is peanuts compared to the Hegemon’s defense budget now approaching $900 billion: China’s stands as $238 billion, even as China’s nominal GDP is approaching the U.S.
A great deal of China’s defense budget will go for emerging tech – considering the immensely valuables lessons the PLA is learning out of the Donbass battlefield, as well as the deep interactions part of the Russia-China strategic partnership.
And that brings us to diplomacy. China will continue to be firmly positioned as a champion of the Global South. That was made explicit by Foreign Minister Wang Yi in a press conference on the sidelines of the National People’s Congress.
Wang Yi’s priorities: to “maintain stable relations with major powers; join hands with its neighbouring countries for progress; and strive for revitalisation with the Global South”.
Wang Yi once again stressed that Beijing favors an “equal and orderly” multipolar world and “inclusive economic globalization”.
And of course he could not allow U.S. Secretary of State Little Blinken – always out of his depth – to get away with his latest “recipe”: “It is impermissible that those with the bigger fist have the final say, and it is definitely unacceptable that certain countries must be at the table while others can only be on the menu.”
BRI as a global accelerator
Crucially, Wang Yi re-emphasized the drive for “high-quality” cooperation within the Belt and Road Initiative (BRI) framework. He defined BRI as “an engine for the common development of all countries and an accelerator for the modernisation of the whole world”. Wang Yi actually said he’s hopeful about the emergence of a “Global South moment in global governance” – in which China and BRI play an essential part.
Li Qiang’s work report, incidentally, had only one paragraph on BRI. But then we find this nugget as Li refers to the New International Land-Sea Trade Corridor – which links China’s landlocked southwest with the eastern seaboard, via Guangxi province.
Translation: BRI will be focusing on opening new economic roads for China’s less developed regions, diversifying from the previous emphasis on Xinjiang.
Dr Wei Yuansong is a member of the CPPCC and also the Chinese Peasants’ and Workers’ Democratic Party – which happens to be one of the eight non-CCP parties in Chinese politics (very few outside of China know about this).
He offered some fascinating comments on BRI to Fengmian News and also stressed the need to “tell China’s story well” to avoid “conflict and incidents” along the BRI road. For that, Wei suggests the need to use an “international language” in telling these stories; that implies using English.
As for what Wang Yi said in his press conference, in fact that was discussed in detail at the closed-door Central Conference on Foreign Affairs Work in late 2023, where it was established that China faced “strategic opportunities” to raise its “international influence, appeal and power” despite “high winds and choppy waters”.
The key takeaway: the narrative war between China and the Hegemon will be pitiless. Beijing is confident it’s capable of offering stability, investment, connectivity and sound diplomacy to the whole Global South, instead of Forever Wars.
That is reflected, for instance, by Ma Xinmin, the Chinese Foreign Ministry’s legal advisor, telling the International Court of Justice that the Palestinians have the right to armed resistance when it comes to fighting the colonialist, racist, apartheid state of Israel. Therefore, Hamas cannot be defined as a terrorist organization.
This is the overwhelming position across the lands of Islam and across the majority of the Global South – linking Beijing with fellow BRICS member Brazil and President Lula, who compared the genocide in Gaza to the Nazi genocide in WWII.
How to resist collective West sanctions
The Two Sessions did reflect Beijing’s full understanding that Hegemon containment and destabilization tactics remain the biggest challenge to China’s peaceful rise. But simultaneously it reflected Chinese confidence on its global diplomatic clout as a force for peace, stability and economic development. It’s an extremely sensitive balance that only the Middle Kingdom seems capable of pulling off.
Then there’s the Trump factor.
Economist Ding Yifan, a former deputy director of the World Development Institute, part of the State Council’s Development Research Centre, is one among those who’s aware China is learning key lessons from Russia on how to resist collective West sanctions – which will be inevitable against China especially if Trump is back at the White House.
And that brings us to the absolute key issue being currently discussed in Moscow, within the Russia-China partnership, and soon among the BRICS: alternative settlement payments to the U.S. dollar, increasing trade among “friendly nations”, and controls on capital flight.
Nearly all Russia-China trade is now in yuan and rubles. As much as Russian trade with the EU fell by 68% in 2023, trade with Asia rose by 5.6% – with new landmarks reached with China ($240 billion) and India ($65 billion) – and 84% of Russia’s total energy exports going to “friendly countries”.
The Two Sessions did not get into detail on some extremely thorny geopolitical issues. For instance, India’s version of multipolarity – considering New Delhi’s unresolved love affair with Washington – is quite different from China’s. Everyone knows – and no one more than the Russians – that within BRICS 10 the biggest strategic issue is how to accommodate the perpetual tension between India and China.
What’s clear even behind the fog of goodwill enveloping the Two Sessions is that Beijing is fully aware of how the Hegemon is – deliberately – already crossing a key Chinese red line, officially stationing “permanent troops” in Taiwan.
Since last year U.S. Special Forces have been training Taiwanese in operating Black Hornet nano microdrones. In 2024 U.S. military advisers are deployed full time at army bases on Kinmen and Penghu islands.
Those actually driving U.S. foreign policy behind the Crash Test Dummy at the White House believe that even as they are powerless to handle the Houthi Ansarallah in the Red Sea, they are capable of poking the Dragon.
No posturing will alter the Dragon’s roadmap. The CPPCC’s political resolution on Taiwan calls for uniting “all patriotic forces”, “deepen integration and development in various fields across the Taiwan Straits”, and go all out on “peaceful reunification”. That will translate in practice into increased economic/trade cooperation, more direct flights, more cargo ports and logistics bases.
As Project Ukraine goes down the drain of history, Project Taiwan will go on overdrive. Forever Wars never die. Bring it on. The Dragon is ready.
Very few people in Russia and across the Global South are as qualified as Sergei Glazyev, the Minister for Integration and Macroeconomics of the Eurasia Economic Commission (EEC), the policy arm of the Eurasia Economic Union (EAEU), to speak about the drive, the challenges and the pitfalls in the road towards de-dollarization.
As the Global South issues widespread calls for real financial stability; India inside the BRICS 10 makes it clear that everyone needs to think seriously about the toxic effects of unilateral sanctions; and Professor Michael Hudson keeps reiterating current policies are not sustainable anymore, Glazyev graciously received me at his office at the EEC for an exclusive, extensive conversation, including fascinating off the record odds and ends.
These are the highlights – as Glazyev’s ideas are being re-examined, and there’s huge expectation for the green light from the Russian government for a new trade settlement model – which for the moment is in the final stages of fine-tuning.
Glazyev explained how his main idea was “elaborated a long time ago. The basic idea is that a new currency should be first of all introduced on the basis of international law, signed by the countries which are interested in the production of this new currency. Not via some kind of conference, like Bretton Woods, with no legitimacy. At the first stage, not all countries would be included. BRICS nations will be enough – plus the SCO. In Russia, we already have our own SWIFT – the SPFS. We have our currency exchange, we have correspondent relations between banks, consultation between Central Banks, here we are absolutely self-sufficient.”
All that leads to adopting a new international currency: “We don’t really need to go large scale. BRICS is enough. The idea of the currency is that there are two baskets: one basket is national currencies of all countries involved in the process, like the SDR, but with more clear, understandable criteria. The second basket are commodities. If you have two baskets, and we create the new currency as an index of commodities and national currencies, and we have a mechanism for reserves, according to the mathematical model that will be very stable. Stable and convenient.”
Then it’s up to feasibility: “To introduce this currency as an instrument for transactions would not be too difficult. With good infrastructure, and all Central Banks approving it, then it’s up to businesses to use this currency. It should be in digital form – which means it can be used without the banking system, so it will be at least ten times cheaper than present transactions through banks and currency exchanges.”
That Thorny Central Bank Question
“Have you presented this idea to the Chinese?”
“We presented it to Chinese experts, our partners at Renmin University. We had good feedback – but I did not have the opportunity to present it on a political level. Here in Russia we promote the discussion via papers, conferences, seminars, but there’s still no political decision on introducing this mechanism even on the BRICS agenda. The proposal by our team of experts is to include it in the agenda of the BRICS summit next October in Kazan. The problem is the Russian Central Bank is not enthusiastic. The BRICS have only decided on an operating plan to use national currencies – which is also a quite clear idea, as national currencies are already used in our trade. Russian ruble is the main currency in the EAEU, trade with China is conducted in rubles and renminbi, trade with India and Iran and Turkiye also switched to national currencies. Each country has the infrastructure for it. If Central Banks introduce digital national currencies and allow them to be used in international trade, it’s also a good model. In this case crypto exchanges can easily balance payments – and it’s a very cheap mechanism. What is needed is an agreement from Central Banks to allow a certain amount of national currencies in digital form to participate in international transactions.”
“Would that be feasible already in 2024, if there is political will?”
“There are some start-ups already. By the way, they are in the West, and the digitalization is conducted by private companies, not Central Banks. So the demand is there. Our Central Bank needs to elaborate a proposal for the summit in Kazan. But this is only one part of the story. The second part is price. For the moment price is determined by Western speculation. We produce these commodities, we consume them, but we do not have our own price mechanism, which will balance supply and demand. During the Covid panic, the price for oil fell to nearly zero. It’s impossible to make any strategic planning for economic development if you do not control prices of basic commodities. Price formation with this new currency should get rid of Western exchanges of commodities. My idea is based on a mechanism that existed in the Soviet Union, in the Comecon. In that period we had long-term agreements not only with socialist countries, but also with Austria, and other Western countries, to supply gas for 10 years, 20 years, the basis of this price formula was the price for oil, and the price for gas.”
So what stands out is the effectiveness of a long-term, long view policy: “We did create a long-term pattern. Here in the EEC we are looking at the idea of a common exchange market. We already prepared a draft, with some experiments. The first step is the creation of an information network, exchanges in different countries. It was rather successful. The second step will be to set up online communication between exchanges, and finally we move to a common mechanism of price formation, and open this mechanism for all other countries. The main problem is that the major producers of commodities, first of all the oil companies, they don’t like to trade through exchanges. They like to trade personally, so you need a political decision to make sure that at least half of production of commodities should go through exchanges. A mechanism where supply and demand balance each other. For the moment the price of oil in foreign markets is ‘secret’. It’s some type of colonial times thinking. ‘How to cheat’. We must create legislation to open all this information to the public.”
The NDB in Need of a Shake-up
Glazyev offered an extensive analysis of the BRICS universe, based on how the BRICS Business Council had its first meeting on financial services in early February. They agreed on a working plan; there was a first session of fintech experts; and during this week a breakthrough meeting may lead to a new formulation – for the moment not made public – to be put into the BRICS agenda for the October summit.
“What are the main challenges within the BRICS structure in this next stage of trying to bypass the US dollar?”
“BRICS in fact is a club which doesn’t have a secretariat. I can tell it, from a person that has some experience in integration. We discussed the idea of a customs union here, on the post-Soviet territory, immediately after the collapse. We had a lot of declarations, even some agreements signed by heads of state, over a common economic space. But only after the establishment of a commission the real work stated, in the year 2008. After 20 years of papers, conferences, nothing was done. You need someone who’s responsible. In BRICS there is such an organization – the NDB [New Development Bank]. If the heads of state decide to appoint the NDB as an institution which will elaborate the new model, the new currency, organize an international conference with the draft of an international treaty, this can work. The problem is that the NDB works according to the dollar charter. They have to reorganize this institution in order to make it workable. Now it works like an ordinary international development bank under the American framework. The second option would be to do it without this bank, but that would be much more difficult. This bank has enough expertise.”
“Could an internal shake-up of the NDB be proposed by the Russian presidency of BRICS this year?”
“We are doing our best. I’m not sure the Ministry of Finance understands how serious this is. The President understands. I personally promoted this idea to him. But the chairman of the Central Bank, and ministers are still thinking in the old IMF paradigm.”
‘Religious Sects Don’t Create Innovation’
Glazyev had a serious discussion on sanctions with the NDB:
“I discussed this issue with Mrs. Rousseff [the former Brazilian President, currently presiding the NDB) at the St. Petersburg Forum. I gave her a paper about it. She was rather enthusiastic and invited us to come to the NDB. But afterwards there was no follow-up. Last year everything was very difficult.”
On BRICS, “the financial services working group is discussing reinsurance, credit rating, new currencies in fintech. That’s what should be in the agenda of the NDB. The best possibility would be a meeting in Moscow in March or April, to discuss in depth the whole range of issues of BRICS settlement mechanism, from most sophisticated to least sophisticated. It would be great if the NDB sign up for it, but as it stands there is a de facto gulf between the BRICS and the NDB.”
The key point, insists Glazyev, is that “Dilma should find time to organize these discussions at a high level. A political decision is needed.”
“But wouldn’t that decision have to come from Putin himself?”
“It’s not so easy. We heard statements by at least three heads of the state: Russia, South Africa and Brazil. They publicly said ‘this is a good idea’. The problem, once again, is there is no task force yet. My idea, which we proposed before the BRICS summit in Johannesburg, is to create an international working group – to prepare in the next sessions the model, or the draft, of the treaty. How to switch to national currencies. That’s the official agenda now. And they have to report about that in Kazan [for the BRICS annual summit]. There are some consultations between the Central Banks and Ministers of Finance.”
Glazyev cut to the chase when it comes to the inertia of the system: “The main problem for bureaucrats and experts is ‘why they don’t have ideas?’ Because they assume the current status quo is the best one. If there are no sanctions, everything will be good. The international financial architecture that was created by the United States and Europe is convenient. Everyone knows how to work in the system. So it’s impossible to move from this system to another system. For businesses it will be very difficult. For banks it will be difficult. People have been educated in the paradigm of financial equilibrium, totally libertarian. They don’t care that prices are manipulated by speculators, they don’t care about volatility of national currencies, They think it’s natural (…) It’s a kind of religious sect. Religious sects don’t create innovation.”
Now Get on That Hypersonic Bicycle
We’re back to the crucial issue of national currencies: “Even five years ago, when I spoke about national currencies in trade, everybody said it was completely impossible. We have long-term contracts in dollars and euro. We have an established culture of transactions. When I was Minister of Foreign Trade, 30 years ago, at the time I tried to push all our trade in commodities into rubles. I argued with Yeltsin and others, ‘we have to trade in rubles, not in dollars’. That would automatically make the ruble a reserve currency. When Europe moved to the euro, I had a meeting with Mr. Prodi, and we agreed, ‘we will use euro as your currency, and you will use rubles’. Then Prodi came to me after consultations and said, ‘I talked to Mr. Kudrin [former Russian Finance Minister, 2000-2011], he didn’t ask me to make the ruble a reserve currency’. That was sabotage. It was stupidity.”
The problems actually run deep – and keep running: “The problem was our regulators, educated by the IMF, and the second problem was corruption. If you trade oil and gas in dollars, a large part of profits is stolen, there are a lot of intermediate companies which manipulate prices. Prices are only the first step. The price for natural gas in the first deal is about 10 times less than the final demand. There are institutional barriers. A majority of countries do not allow our companies to sell oil and gas to the final customer. Like you cannot sell gas to households. Nevertheless, even in the open market, quite competitive, we have intermediates between producer and consumer – at least half of the revenues are stolen from government control. They don’t pay taxes.”
Yet fast solutions do exist: “When we were sanctioned two years ago, transfer from US dollar and euro to national currencies took only a few months. It was very quick.”
On investments, Glazyev stressed success in localized trade, but capital flows are still not there: “The Central Banks are not doing their job. The ruble-renminbi exchange is working well. But the ruble-rupee exchange doesn’t work. The banks that keep these rupees, they have a lot of money, accrue interest rates on these rupees, and they can play with them. I don’t know who’s responsible for this, our Central Bank or the Indian Central Bank.”
The succinct, key takeaway of Glazyev’s serious warnings is that it would be up to the NDB – prodded by the leadership of BRICS – to organize a conference of global experts and open it for public discussion. Glazyev evoked the metaphor of a bicycle that keeps rolling along – so why invent a new bicycle? Well, the – multipolar – time has come for a new hypersonic bicycle.
xenagoguevicene 