We have detailed how Russia and China have developed independent global payment
systems that run parallel to the dollar based SWIFT system. We recently
discussed how sanctions against Russia were actually “crushing the American empire“. The dollar based system is
now obsolete and the entire world is moving questioning why the current
system is the only way to conduct global trade. Well, it’s not.
The Federal Reserve Note (FRN), U.S. dollar is under attack in a variety
of ways. We have been documenting the astronomical growth of the yuan backed futures oil contract and how
this is going to impact the FRN and the American economy. We have also
pointed out that Russia has dumped approximately 82% of their entire U.S.
treasuries and Turkey recently announced they will be offloading
approximately 50% of their treasury holdings.
At the most recent BRICS Summit, held in July, one of biggest take-aways
was the fact the BRICS alliance was in talks with Turkey and the possibility
of Turkey, which is a NATO “partner”, could join BRICS! This is to say
nothing of China, which heads the BRICS alliance, is also in talks with Argentina and Venezuela.
Now we learn that Germany is on board with moving away from SWIFT and the
“trade wars”, sanctions against Russia and President Trump forcing NATO
“partners” to pay up has pushed Germany away from their alliance with the
U.S.. The German / Russian partnership is very important to the overall
German economy and Trump’s recent demand that Germany stop doing oil business
with Russia seems to have pushed them over the edge. There may be more at
play here, but most all geopolitical issues in the 21st century boil down to
oil, oil production and how to get the cheapest oil possible. Whatever the
motivation, Germany wants out of SWIFT as they have come to realize how
strangling this payment system is to any and all economies utilizing this
platform.
In a stunning vote of “no confidence” in the US monopoly over global
payment infrastructure, Germany’s foreign minister Heiko Maas called for the
creation of a new payments system independent of the US
that would allow Brussels to be independent in its financial operations from
Washington and as a means of rescuing the nuclear deal between Iran and the
west.
Writing in the German daily Handelsblatt, Maas said “Europe should
not allow the US to act over our heads and at our expense. For that
reason it’s essential that we strengthen European autonomy by establishing
payment channels that are independent of the US, creating a European
Monetary Fund and building up an independent Swift system,” he
wrote, cited
by the FT.
Maas said it was vital for Europe to stick with the Iran deal. “Every day
the agreement continues to exist is better than the highly explosive crisis
that otherwise threatens the Middle East,” he said, with the unspoken message
was even clearer: Europe no longer wants to be a vassal state to US monopoly
over global payments, and will now aggressively pursue its own “Swift”
network that is not subservient to Washington’s every whim.
****
Swift is also affected: unless it wins an exemption from sanctions, it
will be required by the US to cut off targeted Iranian banks from its network
by early November or face possible countermeasures against both its
board members and the financial institutions that employ them. These could
include asset freezes and US travel bans for the individuals, and
restrictions on banks’ ability to do business in the US.
Maas’s stark warning against US domination of global payments comes with
relations between Germany and the US in their worst state for decades. Mr
Trump has chastised Berlin over its large trade surplus, its relatively low
military spending and its support for Nord Stream 2, a new gas pipeline that
will bring Russian gas directly to Germany.
Meanwhile, Berlin has looked on in dismay as Mr Trump has withdrawn the US
from the Iran deal and the Paris climate treaty, imposed import tariffs on EU
steel and aluminium and appeared to question America’s commitment to Nato.
In short: Europe has finally had enough and it plans on hitting back at
Trump where it truly hurts: the money. Source
I have to believe that Germany knows and understands that both China and
Russia have alternative payment systems in place. I have to believe that
Germany actually reads news that that discusses situations like CIPS and the
Russian payment system, SCO, BRI and all the other Eastern alliances that are
redeveloping the global economy.
All of these discussions, policy changes and actions all point to one
thing – de-dollarization. It’s a slow walk, we believe another 7-10 years,
mid / late 2020’s will be the timeframe this whole picture is realized
and the FRN no longer carries any weight at all on the global stage.
