{"id":207463,"date":"2022-03-21T12:00:06","date_gmt":"2022-03-21T12:00:06","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=207463"},"modified":"2022-03-20T08:47:16","modified_gmt":"2022-03-20T08:47:16","slug":"say-hello-to-russian-gold-and-chinese-petroyuan","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2022\/03\/say-hello-to-russian-gold-and-chinese-petroyuan\/","title":{"rendered":"Say Hello to Russian Gold and Chinese Petroyuan"},"content":{"rendered":"

The Russia-led Eurasia Economic Union and China just agreed to design the mechanism for an independent financial and monetary system that would bypass dollar transactions.<\/em><\/p><\/blockquote>\n

\"\"<\/a>

Russia says half its gold assets were frozen – is this for real or a slick play by Moscow?\u00a0 Photo Credit: The Cradle<\/p><\/div>\n

15 Mar 2022 – <\/em>It was a long time coming, but finally some key lineaments of the multipolar world\u2019s new foundations are being revealed.<\/p>\n

\n

On Friday, after a videoconference meeting, the Eurasian Economic Union (EAEU) and China agreed to design the mechanism for an independent international monetary and financial system<\/a>. The EAEU consists of Russia, Kazakhstan, Kyrgyzstan, Belarus and Armenia, is establishing free trade deals with other Eurasian nations, and is progressively interconnecting with the Chinese Belt and Road Initiative (BRI).<\/p>\n

For all practical purposes, the idea comes from Sergei Glazyev, Russia\u2019s foremost independent economist, a former adviser to President Vladimir Putin and the Minister for Integration and Macroeconomics of the Eurasia Economic Commission<\/a>, the regulatory body of the EAEU.<\/p>\n

Glazyev\u2019s central role in devising the new Russian and Eurasian economic\/financial strategy has been examined here<\/a>. He saw the western financial squeeze on Moscow coming light-years before others.<\/p>\n

Quite diplomatically, Glazyev attributed the fruition of the idea to\u00a0\u201cthe common challenges and risks associated with the global economic slowdown and restrictive measures against the EAEU states and China.\u201d<\/p>\n

Translation: as China is as much a Eurasian power as Russia, and they need to coordinate their strategies to bypass the US unipolar system.<\/p>\n

The Eurasian system will be based on \u201ca new international currency,\u201d most probably with the yuan as reference, calculated as an index of the national currencies of the participating countries, as well as commodity prices.\u00a0The first draft will be already discussed by the end of the month.<\/p>\n

The Eurasian system is bound to become a serious alternative to the US dollar, as the EAEU may attract not only nations that have joined BRI (Kazakhstan, for instance, is a member of both) but also the leading players in the Shanghai Cooperation Organization (SCO)<\/a> as well as ASEAN. West Asian actors \u2013 Iran, Iraq, Syria, Lebanon \u2013 will be inevitably interested.<\/p>\n

In the medium to long term, the spread of the new system will translate into the weakening of the Bretton Woods system, which even serious US market players\/strategists admit is rotten from the inside. The US dollar and imperial hegemony are facing stormy seas.<\/p>\n

Show me that frozen gold<\/strong><\/p>\n

Meanwhile, Russia has a serious problem to tackle. This past weekend, Finance Minister Anton Siluanov confirmed that half of Russia\u2019s gold and foreign reserves have been frozen by unilateral sanctions. It boggles the mind that Russian financial experts have placed a great deal of the nation\u2019s wealth where it can be easily accessed \u2013 and even confiscated \u2013 by the \u2018Empire of Lies\u2019 (copyright Putin).<\/p>\n

At first, it was not exactly clear what Siluanov had meant. How could the Central Bank\u2019s Elvira Nabiulina and her team let half of foreign reserves and even gold be stored in Western banks and\/or vaults? Or is this some sneaky diversionist tactic by Siluanov?<\/p>\n

No one is better equipped to answer these questions than the inestimable Michael Hudson, author of the recent revised edition of\u00a0Super Imperialism: The Economic Strategy of the American Empire<\/a>.<\/p>\n

Hudson was quite frank: \u201cWhen I first heard the word \u2018frozen,\u2019 I thought that this meant that Russia was not going to expend its precious gold reserves on supporting the ruble, trying to fight against a Soros-style raid from the west. But now the word \u2018frozen\u2019 seems to have meant that Russia had sent it abroad, outside of its control.\u201d<\/p>\n

\u201cIt looks like at least as of last June, all Russian gold was kept in Russia itself. At the same time, it would have been natural to have kept securities and bank deposits in the United States and Britain, because that is where most intervention in world foreign exchange markets occurs,\u201d Hudson added.<\/p>\n

Essentially, it\u2019s all still up in the air: \u201cMy first reading assumed that Russia must be doing something smart. If it was smart to move gold abroad, perhaps it was doing what other central banks do: \u2018lend\u201d it to speculators, for an interest payment or fee. Until Russia tells the world where its gold was put, and why, we can\u2019t fathom it. Was it in the Bank of England \u2013 even after England confiscated Venezuela\u2019s gold? Was it in the New York Fed \u2013 even after the Fed confiscated Afghanistan\u2019s reserves?\u201d<\/p>\n

So far, there has been no extra clarification either from Siluanov or Nabiulina. Scenarios swirl about a string of deportations to northern\u00a0 Siberia for national treason. Hudson adds important elements to the puzzle:<\/p>\n

\u201cIf [the reserves] are frozen, why is Russia paying interest on its foreign debt falling due? It can direct the \u201cfreezer\u2019 to pay, to shift the blame for default. It can talk about Chase Manhattan\u2019s freezing of Iran\u2019s bank account from which Iran sought to pay interest on its dollar-denominated debt. It can insist that any payments by NATO countries be settled in advance by physical gold. Or it can land paratroopers on the Bank of England, and recover gold \u2013 sort of like Goldfinger at Fort Knox. What is important is for Russia to explain what happened and how it was attacked, as a warning to other countries.\u201d<\/p>\n

As a clincher, Hudson could not but wink at Glazyev: \u201cMaybe Russia should appoint a non-pro-westerner at the Central Bank.\u201d<\/p>\n

The petrodollar game-changer<\/strong><\/p>\n

It\u2019s tempting to read into Russian Foreign Minister Sergey Lavrov\u2019s words at the diplomatic summit in Antalya last Thursday as a veiled admission that Moscow may not have been totally prepared for the heavy financial artillery deployed by the Americans:<\/p>\n

\u201cWe will solve the problem \u2013 and the solution will be to no longer depend on our western partners, be it governments or companies that are acting as tools of western political aggression against Russia instead of pursuing the interests of their businesses. We will make sure that we never again find ourselves in a similar situation and that neither some Uncle Sam nor anybody else can make decisions aimed at destroying our economy. We will find a way to eliminate this dependence. We should have done it long ago.\u201d<\/p>\n

So, \u2018long ago\u2019 starts now. And one of its planks will be the Eurasian financial system. Meanwhile, \u2018the market\u2019 (as in, the American speculative casino) has \u2018judged\u2019 (according to its self-made oracles) that Russian gold reserves \u2013 the ones that stayed in Russia \u2013 cannot support the ruble.<\/p>\n

That\u2019s not the issue \u2013 on several levels. The self-made oracles, brainwashed for decades, believe that the Hegemon dictates what \u2018the market\u2019 does. That\u2019s mere propaganda. The crucial fact is that in the new, emerging paradigm, NATO nations amount to at best 15 percent of the world\u2019s population. Russia won\u2019t be forced to practice autarky because it does not need to: most of the world \u2013 as we\u2019ve seen represented in the hefty non-sanctioning<\/em> nation list \u2013 is ready to do business with Moscow.<\/p>\n

Iran has shown how to do it. Persian Gulf traders confirmed to The Cradle<\/em> that Iran is selling no less than 3 million barrels of oil a day even now, with no signed JCPOA (Joint Comprehensive Plan of Action agreement, currently under negotiation in Vienna). Oil is re-labeled, smuggled, and transferred from tankers in the dead of night.<\/p>\n

Another example: the Indian Oil Corporation (IOC), a huge refiner, just bought 3 million barrels of Russian Urals from trader Vitol for delivery in May. There are no sanctions on Russian oil \u2013 at least not yet.<\/p>\n

Washington\u2019s reductionist, Mackinderesque plan is to manipulate Ukraine as a disposable pawn to go scorched-earth on Russia, and then hit China. Essentially, divide-and-rule to smash not only one but two<\/em> peer competitors in Eurasia who are advancing in lockstep as comprehensive strategic partners.<\/p>\n

As Hudson sees it: \u201cChina is in the cross-hairs, and what happened to Russia is a dress rehearsal for what can happen to China.\u00a0Best to break sooner than later under these conditions. Because the leverage is highest now.\u201d<\/p>\n

All the blather about \u201ccrashing Russian markets,\u201d ending foreign investment, destroying the ruble, a \u201cfull trade embargo,\u201d expelling Russia from \u201cthe community of nations,\u201d and so forth \u2013 that\u2019s for the zombified galleries. Iran has been dealing with the same thing for four decades, and survived.<\/p>\n

Historical poetic justice, as Lavrov intimated, now happens to rule that Russia and Iran are about to sign a very important agreement, which may likely be an equivalent of the Iran-China strategic partnership. The three main nodes of Eurasia integration are perfecting their interaction on the go, and sooner rather than later, may be utilizing a new, independent monetary and financial system.<\/p>\n

But there\u2019s more poetic justice on the way, revolving around the ultimate game-changer. And it came much sooner than we all thought.<\/p>\n

Saudi Arabia is considering accepting<\/a> Chinese yuan \u2013 and not US dollars \u2013 for selling oil to China. Translation: Beijing told Riyadh this is the new groove. The end of the petrodollar is at hand \u2013 and that is the certified nail in the coffin of the indispensable Hegemon.<\/p>\n

Meanwhile, there\u2019s a mystery to be solved: where is that frozen Russian gold?<\/p>\n

_______________________________________________<\/em><\/p>\n

\"\"<\/a> Pepe Escobar, born in Brazil, is a correspondent and editor-at-large at <\/em>Asia Times and<\/em> columnist for<\/em> Consortium News and<\/em> Strategic Culture in Moscow. Since the mid-1980s he\u2019s lived and worked as a foreign correspondent in London, Paris, Milan, Los Angeles, Singapore, and Bangkok. He has extensively covered Pakistan, Afghanistan and Central Asia to China, Iran, Iraq and the wider Middle East. He is the author of <\/em>Globalistan<\/a> (2007),<\/em> Red Zone Blues<\/a> (2007), <\/em>Obama Does Globalistan<\/a> (2009), <\/em>Empire of Chaos<\/a> (2014) and <\/em>2030<\/a> (2015), all by Nimble Books. Pepe was contributing editor to <\/em>The Empire and The Crescent and<\/em> Tutto in Vendita in Italy and is also associated with the Paris-based European Academy of Geopolitics. When not on the road he lives between Paris and Bangkok. <\/em><\/p>\n

Go to Original \u2013 thecradle.co<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

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