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Saturday, March 30, 2019

Challenging the USD

It appears that the Russian and Chinese alternative payment systems may be in the process of merging:
Several Russian banks have joined the China International Payments System (CIPS), to ease operations between the two countries, according to a senior official at the Central Bank of Russia (CBR).

“As for the cooperation on payment systems, a range of banks are already connected to CIPS, allowing to facilitate payments routing procedure,” Vladimir Shapovalov, who heads a division dealing with foreign regulators at the CBR’s international cooperation department, said earlier this week during the international Russian-Chinese forum.
Given the fact that Italy recently joined the Chinese Silk Road trade initiative, this decision by Russian banks would appear to presage an eventual merger between CIPS and SPFS, which would make for a powerful, nuclear weapons-backed alternative to the US SWIFT system that the US has been using to impose its will upon countries everywhere from Africa and the Caribbean to Europe and Asia.

The USA destroyed earlier monetary challenges from Iraq and Libya, which only appears to have convinced Iran, China, and Russia of the need to work together in order to free themselves of the neo-liberal financial empire. This may be the first substantial sign of the end of U.S. empire, as we'll know the beginning of the end has been officially reached when the EU and Switzerland abandon SWIFT in favor of whatever the rival new payment system ends up being called.

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33 Comments:

Blogger God Emperor Memes March 30, 2019 6:44 AM  

Huh. I wonder what the Rothschilds think about this?

Blogger Ingot9455 March 30, 2019 7:24 AM  

I used to scoff at such ideas on the basis that even lame as it was, the level of the US rule of law was so much better than in China or Russia. I mean, here there used to be at least a chance that nobody connected will be involved with your court case and things will proceed with some respect to the written law. But that hasn't happened for s while now and won't until the mass arrests.

Blogger Stilicho March 30, 2019 7:29 AM  

Meet the new boss, same as the old boss... now with extra fiat.

A rival exchange system and a rival currency might spark the resurgence of gold, since no one will trust either one unless forced to.

Blogger TheMaleRei March 30, 2019 7:29 AM  

@1
Well if they can't relocate to China and rule from there... They probably would rather rule over radioactive rubble than lose... Servants of the prince of this world, indeed.

Blogger Thad tuiol March 30, 2019 7:33 AM  

As VD pointed out, the key thing here is that all this is backed up by a nuclear deterrent. The (((Americans)))can't get by with their usual playbook of applying sanctions, black ops, military threats, infiltration and conventional warfare. Oh, what's one of the chosen people to do?

Blogger DJT March 30, 2019 7:42 AM  

Russia and China have always been rivals. It's too bad we missed the chance to team up with Russia against China, instead we will be on the losing end.

Blogger Azure Amaranthine March 30, 2019 8:22 AM  

"Oh, what's one of the chosen people to do?"

Probably interbreed until they're hard to pick out, while adopting local or local-seeming names. Judging by the last few iterations, anyway.

They won't make it to the top this time, though.

Blogger Azimus March 30, 2019 8:24 AM  

Is Italy joining the Silk Road purely symbolic, since they're part of the Eurozone? Or does Italy's joining mean the whole Eurozone joined as well?

Blogger Longtime Lurker March 30, 2019 8:28 AM  

CIPS gives Russian banks a back door into SWIFT, which gives Moscow a way to work around U.S. sanctions. (CIPS and SWIFT signed an MOU to cooperate in March 2016.) If Washington doesn't like it, it can push back on Beijing while the Russian Central Bank laughs.

Blogger Avalanche March 30, 2019 8:35 AM  

Bit of trivia, in passing.

When I moved my company's banking biz from a U.S. BANK to Navy Federal Credit Union, I had to explain to my Chinese, Taiwanese, Korean, and even Australian distributors that, even WITHOUT a SWIFT number, they could TRF money into the CU.

There is still a 'skim' -- there are five "intermediary banks" -- big-old Chase is the one that steals a bit from me to allow the money to enter the States; but no massive bank fees from the biz bank to receive it! Oddly the distributors in The Netherlands and Korea do NOT get hit with a skim; the others all still do.

'nother bit of trivia: The Netherlands no longer has or uses paper checks.

Blogger ZhukovG March 30, 2019 8:36 AM  

The USA has been throwing everything it can at Russia, short of directly invading the Russian Federation with American Forces. We did attempt a limited 'invasion by proxy' which set off the Second Chechnya War.

Every thing we have done has had little effect save to strengthen the Russian position as a Great Power.

But this, along with other international developments, is basically the world bracing itself for the coming end of the American Empire.

Blogger Garuna March 30, 2019 8:56 AM  

Probably interbreed until they're hard to pick out, while adopting local or local-seeming names. Judging by the last few iterations, anyway. They won't make it to the top this time, though.

Certainly not. Jews made a big mistake weakening their high-trust Western host, who is getting savvy to their tricks and will soon kick them out. They don't understand Asian brutality. And if they try their usual shenanigans in the East, they'll learn about it the hard way.

Blogger Skyler the Weird March 30, 2019 9:23 AM  

Isn't the Hague where 'The Beast', the banking transaction Super Computer resides? The Dutch if they still exist after the invasion won't need checks nor cash just a microchip with banking information. Afraid of it being Stolen? No worries. They'll imbed it on your palm or conveniently on your forehead if you lost both arms in the latest religion of peace lovefest.

Blogger Brett baker March 30, 2019 10:29 AM  

This could be a problem; then again,"We're bypassing the American banking system" has been attempted before.

Blogger English Tom March 30, 2019 11:15 AM  

@Azimus

Good question. I believe the EU is finished. The East is rising, the continent of Eurasia will eventually merge into a single bloc, overseen by the EAEU (Eurasian Economic Union) with Russia as the balancer. The city of Astana will play the same role as the city of Brussels does with the EU today.

Blogger The Observer March 30, 2019 11:26 AM  

Certainly not. Jews made a big mistake weakening their high-trust Western host, who is getting savvy to their tricks and will soon kick them out. They don't understand Asian brutality. And if they try their usual shenanigans in the East, they'll learn about it the hard way.

They've been in China since Mao at least; Mao's mentor was Jewish and they paved the path for the Revolution and have served as advisors since then. Even today, there are Jews in the CCP Politburo.

Blogger Ominous Cowherd March 30, 2019 11:28 AM  

@10, Avalanche, a further bit of data: our Federal Credit Union cannot wire money to Taiwan. Taiwanese banks have no trouble wiring money to it. Wells Fargo is the corresponding bank for this FCU.

Blogger Ominous Cowherd March 30, 2019 11:32 AM  

Garuna wrote:Jews made a big mistake ... They don't understand Asian brutality.

When Chinese read Joshua, they aren't shocked by the genocide in Canaan.

Blogger JACIII March 30, 2019 11:52 AM  

How about we all just abandon the pretense and use shekels?

Blogger Dan Karelian March 30, 2019 12:32 PM  

Dollar hegemony will surely crumble if the Petroyuan ever takes off the ground under Eurasian trading infrastructure.

Blogger Northpal March 30, 2019 12:34 PM  

Oh boy, the deep pit of international banking, are there really any National interests down there ???
CIPS only attraction as a way to avoid punitive financial sanctions imposed by who ever the hell it is running the American Empire these days.
China like everyone else are conforming to Basel III as they slowly try to reform their domestic banks (it's a big country) resulting in monthly closures. China's domestic banking is as big a mess as Japan's was in the 1980's, but at least they have a strong (while it lasts) political will to finally deal with it.
The FED on the other hand cannot agree on a stress test banks need to demonstrate that they would be able to meet Basel III capital and leverage requirements with the usual suspects of financial banditry screaming gloom and doom.
No matter who, what, when, where, us little sheep with our little hopes, wishes and desires are of no concern way down in that pit of international banking.
As far as Italy joining the Chinese Silk Road trade initiative. Rome and China historically always had a one way trade road, also Italy as always just needs the money.
China, Russia, Europe play and will play absolutely no role in the end of the American Empire, it took a while but that 150 year old virus gets to enjoy the rotted corpse.
Oh the days as a young lad reading the arguments why we needed to run trade deficits because the rest of the worn torn world yelping for more 'Yankee Dollahs' overseas needed a stable currency and market.

Blogger VFM #7634 March 30, 2019 1:13 PM  

As I see it, the only problem is this sort of thing needs to have at least one important participant country that's from a high-trust, low-corruption Western civilization, otherwise it won't work, even if the neocons don't decide to knock it over. If Italy is signing up, that's telling, but it's still a second-tier, semi-corrupt power.

If the beleaguered American nation sticks with the Trump revolution, that may be one possibility.

Blogger Lance E March 30, 2019 1:31 PM  

A little competition will not only be good for the world, it will be good for the USA.

Imagine if U.S. banks actually had to run themselves efficiently and provide decent and reliable service.

Blogger One Deplorable DT March 30, 2019 1:34 PM  

SWIFT's days were numbered the moment cryptocurrency was born. If the Russia/China backed alternative doesn't take off then it's only a matter of time before a cryptocurrency gets the legs and trust under it necessary to settle large international transactions. Small to medium transactions are increasingly being cleared via crypto.

I read a good paper (can't find the link now) about this very topic, and about what it means for America's ability to borrow, borrow, borrow every budget cycle when (not if) SWIFT takes a tumble. And despite the short term pain, putting an end to the USD's dominance would be a good thing if it would force FedGov to stop spending like drunken sailors at a whore house. And to stop initiating needless wars...I'm sorry..."military interventions for freedom."

Blogger kurt9 March 30, 2019 1:37 PM  

If a full competitor to SWIFT emergences, is not not likely that banks and other financial institutions will sign up for both?

Blogger Don't Call Me Len March 30, 2019 2:45 PM  

Dan Karelian's got it. Who gives a wet slap if China and Russia want their own rinky-dink bank transfer system to swap piles of cheap knockoffs? That's no big deal.

But if the ChiComs are no longer required to stockpile US Treasuries to cover their huge oil bill, then it's everybody out of the water.

Blogger SciVo March 30, 2019 5:27 PM  

What are the best news sources for tracking developments like this? Most people are simply incapable of understanding its significance, and those that can are rarely interested in being reporters.

Blogger eclecticme March 30, 2019 6:27 PM  

I do not understand this international finance stuff and never will. Do these SWIFT replacements rely on trust or international law? I am just wondering because the Chinese legal system is fairly corrupt.

The US is overusing sanctions. More countries need a way around them.

Blogger eclecticme March 30, 2019 6:32 PM  

For those with historical interest, there is a book on how the US used financial sanctions against Japan, leading to Pearl Harbor. It is very detailed.

Bankrupting the Enemy: The U.S. Financial Siege of Japan Before Pearl Harbor Hardcover – September 10, 2007
by Edward S. Miller (Author)

Blogger JovianStorm March 30, 2019 8:38 PM  

The main difference between China and the US government at this point is that China isn't hiding its ambitions behind a flimsy facade of democracy and freedom.

If SWIFT gets flushed, then it deserved to be flushed... Especially if the new system is technologically superior.

Blogger Snidely Whiplash March 31, 2019 12:09 AM  

After the EU collapse, no Euro country will be eager to jump into another union, and China won't be willing to bribe them. Russia is way too smart.

Blogger Patrick Pham March 31, 2019 1:06 AM  

When you tie a loser to a loser, it doesn't become a winner. China wants as much access to foreign capital as possible. Russia wants to contain its satellites from moving further west. Iran just wants a seat at the kiddie table. None of these partners have a common goal. Even if SWIFT degenerates from its preminency, it will immediately splinter as Russia and China rush to gain the advantage of hegemonic economic control.

Blogger Ominous Cowherd March 31, 2019 12:16 PM  

One Deplorable DT wrote:... it's only a matter of time before a cryptocurrency gets the legs and trust under it necessary to settle large international transactions.

Very doubtful. Put not your faith in chariots, nor in coders who think they're mathematicians, nor mathematicians who think they're coders.

We've seen way too much bogosity and failure in the blockchain/cryptocurrency world. It has none of the features that would make it valuable for private use, and none of the implementations to date show signs of being solid enough for official use.

Crypto as implemented to date looks more like a honeypot than anything safe and useful.

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