Say Hello to Russian Gold And Chinese Petroyuan
The comments below are an edited and abridged synopsis of an article by Pepe Escobar
It was a long time coming, but finally some key elements of the world’s new foundations are being revealed.
Last week, the Eurasian Economic Union (Russia, Kazakhstan, Kyrgyzstan, Belarus, Armenia) and China agreed to design an independent international monetary and financial system. They are establishing free trade deals with other Eurasian nations, and are interconnecting with the Chinese Belt and Road Initiative.
The idea comes mainly from Sergei Glazyev, Russia’s foremost independent economist, a former advisor to President Vladimir Putin and the Minister for Integration and Macroeconomics of the Eurasia Economic Commission, the regulatory body of the EAEU.
Glazyev attributed the idea to “the common challenges and risks associated with the global economic slowdown and restrictive measures against the EAEU states and China.” Translation: China is as much a Eurasian power as Russia, and thus they need to coordinate their strategies to bypass the US system.
The Eurasian system will be based on a new international currency, probably with the yuan as reference, calculated as an index of the national currencies of the participating countries, as well as commodity prices.
This will become a serious alternative to the US dollar, as the EAEU may attract not only nations that have joined BRI (Kazakhstan is a member of both) but also the leading players in the Shanghai Cooperation Organization (SCO) as well as ASEAN. West Asian countries—Iran, Iraq, Syria, Lebanon—will also be interested.
The the new system will mean a weakening of the Bretton Woods system, which US market players/strategists admit is rotten from the inside. The US dollar and imperial hegemony are facing stormy seas.
Escobar discusses where Russia’s frozen gold is, and the petrodollar game changer.