The status of the US dollar as the world reserve currency gives the US a number of advantages over other countries. The world\u2019s most important commodities are priced and traded in dollars, even if most of these commodities are not produced in the US. The fact that the world\u2019s financial system is based on the dollar allows the Federal Reserve to export inflation to other countries, while the Federal Government runs a huge deficit with impunity.<\/p>\n
So far, only China has been active in challenging the dollar supremacy. The internationalization of the yuan is an official priority of Chinese leaders. Currency swap agreements with major trade partners like Brazil, France, or Australia are small but important steps in the Chinese strategy. Changing the world financial system is not an easy task and certainly a very challenging undertaking for China. Now, it seems that Beijing has found an ally in the Kremlin. And there appears to be a consensus between the BRICS countries: the urgent necessity to dismantle the dollar system.<\/p>\n
A week before the recent BRICS summit in Durban, the Kremlin administration has silently produced a document which describes the Russian strategy in the context of BRICS cooperation. The document makes for a fascinating read for anyone brave enough to plow through the dense Russian legalese. The strategy has been designed in the \u201cinner circle\u201d of Vladimir Putin\u2019s team, so it is safe to assume that it represents the official view on the BRICS future.<\/p>\n
In Russia, politics are Byzantine; the fact that the Kremlin decided not to hide the document or leak it to a chosen few journalists, but publish it outright is a very strong signal, a very vocal angry signal directed at the US. A signal that the Western media chose to ignore.<\/p>\n
In the recitals section of the document, the authors point out that \u201cthere is a common desire of the BRICS partners to reform the outdated global financial and economic framework that doesn\u2019t take into account the growing economic weight of the emerging markets.\u201d Moreover, the Russian strategists view the BRICS as a tool to reform the way the world is being governed. Then the document hammers home its message:<\/p>\n
Russia assumes that, given enough political will of the leadership of the BRICS countries to advance their cooperation, this alliance can become one of the key elements of a new system for global governance, primarily in the economic and financial domains.<\/p>\n
Move aside New World Order! The BRICS are coming to change the world.<\/p>\n
The goals are clear. In the section titled \u201cStrategic goals,\u201d the first point on the BRICS\u2019 agenda is the reform of the world financial system in order to make it \u201cfairer, more stable, and more efficient.\u201d In the later chapters, it is spelled clearly that this \u201creform\u201d is actually a dismantling of the dollar system.<\/p>\n
It is worth noting that the place of this issue in the list of the BRICS\u2019 priorities speaks volumes about its importance. Judging by the order of priorities, depriving the dollar of its status as the world reserve currency is more important than \u201cpreventing breaches of sovereignty\u201d (a.k.a. the \u201cSyrian problem\u201d) or \u201cexpanding economic cooperation.\u201d<\/p>\n
The language used in this document indicates that it has been written or strongly influenced by Sergei Glaziev, the president\u2019s economy advisor, who is known for masterminding the economic aspects of the Eurasian Union between Russia, Belarus, and Kazakhstan. Glaziev has repeatedly accused Fed Chairman Ben Bernanke of starting \u201ca currency war\u201d against the emerging markets. He also believes that Bernanke\u2019s policy will ultimately lead to a military confrontation: \u201cthe conservation logic of the current financial and political system leads to a further escalation of military and political tensions, including the start of a major war\u201d (read more<\/a>).<\/p>\n A whole chapter of the strategy document is dedicated to step-by-step instructions on dismantling the existing global financial system. The list of measures includes:<\/p>\n Since the Durban Summit, at least one of those measures has been implemented: RT reported that \u201cChina\u2019s Dagong Global Credit Rating agency is to set up the joint venture with US-based Egan-Jones Ratings Co (EJR) and Russia’s RusRating JSC to challenge the three major US ratings agencies.\u201d As BRICS countries try to achieve the rest of their stated goals, it remains to be seen if the dollar system survives the joint onslaught of the biggest emerging economies. By Valentin M\u00e2ndr\u0103\u015fescu, author of the pungent article on the inner machinations of Russia….<\/i> Cyprus: A Triumph For Russian\u00a0Isolationists<\/a><\/p>\n _____________________<\/p>\n Valentin M\u00e2ndr\u0103\u015fescu, Editor of Reality Check<\/a> @ The Voice of Russia. <\/b><\/i>Former commodity trader, economist, journalist. Nomadic lifestyle. When not in Moscow, he can be found travelling across Eastern Europe. Areas of interest: world economy, East European politics, and the theory of propaganda.<\/i><\/p>\n\n