Why Washington is Terrified of Russia, China

This happens just after China’s First Vice-Premier Zhang Gaoli, one of the top seven in the Politburo and one of the drivers of China’s economic policies, was received in Moscow by President Putin. They discussed Chinese investments in Russia and the key energy angle of the partnership.
But most of all they prepared Putin’s next visit to Beijing, which will be particularly momentous, in the cadre of the One Belt, One Road (OBOR) summit on May 14-15, steered by Xi Jinping.

The General Office of the CCP – directly subordinated to Xi — only holds this kind of ultra-high-level annual consultations with Moscow, and no other player. Needless to add, Li Zhanshu reports directly to Xi as much as Vaino reports directly to Putin. That is as highly strategic as it gets.


Exhibit B centers on Russia and China quietly advancing their agreement to progressively replace the US dollar’s reserve status with a gold-backed system.

That also involves the key participation of Kazakhstan – very much interested in using gold as currency along OBOR. Kazakhstan could not be more strategically positioned; a key hub of OBOR; a key member of the Eurasia Economic Union (EEU); member of the Shanghai Cooperation Organization (SCO); and not by accident the smelter of most of Russia’s gold.

In parallel, Russia and China are advancing their own payment systems. With the yuan now enjoying the status of a global currency, China has been swiftly promoting their payment system, CIPS, careful not to frontally antagonize the internationally accepted SWIFT, controlled by the US.

Russia, on the other hand, has stressed the creation of « an alternative, » in the words of Russian Central Bank’s Elvira Nabiullina, in the form of the Mir payment system — a Russian version of Visa/ MasterCard. What’s implied is that were Washington feel inclined to somehow exclude Russia from SWIFT, even temporarily, at least 90 percent of ATMs in Russia would be able to operate on Mir.

China’s Union Pay cards are already an established fixture all across Asia – enthusiastically adopted by HSBC, among others. Combine « alternative » payment systems with a developing gold-backed system – and « toxic » does not even begin to spell out the reaction of the US Federal Reserve.

And it’s not just about Russia and China; it’s about the BRICS.

What First Deputy Governor of Russia’s Central Bank Sergey Shvetsov has outlined is just the beginning: « BRICS countries are large economies with large reserves of gold and an impressive volume of production and consumption of this precious metal. In China, the gold trade is conducted in Shanghai, in Russia it is in Moscow. Our idea is to create a link between the two cities in order to increase trade between the two markets. »

Russia and China already have established systems to do global trade bypassing the US dollar. What Washington did to Iran — cutting their banks off SWIFT – is now unthinkable against Russia and China.

So we’re already on our way, slowly but surely, towards a BRICS « gold marketplace. » A « new financial architecture » is being built. That will imply the eventual inability of the US Fed to export inflation to other nations – especially those included in BRICS, EEU and SCO.

via Why Washington is Terrified of Russia, China

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