Welcome to Saturday's Potluck - 12-18-2021
“Learn the rules like a pro, so you can break them like an artist.”
Shh - it's secret
England's monetary system of control has continued to persist after occupying forces exited its colonies. Quietly in a bubble of secrecy created and protected by legal contracts wealth extraction continues by international corporations, governing elites, illegal activities and wealthy individuals. It is speculated up to 50% of the world's wealth is in Tax havens.
American's we are not so subtle. Economic sanctions are one of the tools of diplomacy to control a country. If that doesn't work the military can be sent anywhere in the world. If an Allie it might start with military advisors and expand to a full base. If not a friend - obey or be bombed. If you are too powerful, we will just destabilize a neighbor or support an opposition group.
Profiting from a strategic blunder
Once again, an American strategic blunder offers the Russia-China self-described “comprehensive strategic partnership” the chance to advance their coordination.
Ushakov put it very diplomatically: it’s time to bypass a SWIFT mechanism “influenced by third countries” to form “an independent financial structure.”
That amounts to a serious game-changer for the entire Global South – as scores of nations yearn to be released from a de facto US dollar dictatorship, complete with recurring Fed quantitative easing circus packages.
Russia and China have been experimenting with their alternative payment systems for quite a while now: the Russian SPFS (System for Transfer of Financial Messages) and the Chinese CIPS (Cross Border Interbank Payment System).
It won’t be easy, as the most powerful Chinese banks are deep into SWIFT and have expressed their reservations about SPFS. Yet, they will have to inevitably integrate prior to the launch of the new mechanism, possibly in late 2022.
Once the most important Russian and Chinese banks – from Sberbank to the Bank of China – adopt the system, the path opens for other banks across Eurasia and the Global South to join in.
In the long run, SWIFT, prone to non-stop American political interference, will be increasingly marginalized, or restricted to Atlanticist latitudes.
What is on your mind today? (Responses to Covid questions and dialog to be conducted at The Dose diary)