One benefit of being the World Reserve Currency and the largest economy is the ability to emplace sanctions or control measures on uncooperative nations. This has worked for many years, but China and Russia can work out complex scenarios to avoid American sanctions faster than the U.S. Government and its Allies can emplace new measures.
In May 2024, President Putin conducted a visit to China to meet President Xi. Out of this visit came a Chinese/Russia language statement that was filled with six references to a “New Era” in the word. The real meaning of the term “New Era” from the statement is a world environment without the dominance of the American led, world economic system. In June, the U.S. Treasury Department sanctioned Russia’s VTB Bank, the Russian bank with a major Shanghai, China branch to help restrict the flow of war material to Russia.
But in May since Putin’s visit to China and pre-dating the U.S. Treasury move, specially authorized new banks were already being set up in Chinese border regions which allowed Russian firms to open non-resident accounts (NRA) with Chinese banks, a financial ju-jitsu that largely nullified the new American Sanctions when they were emplaced in June. A brilliant tactical maneuver by China and Russia that anticipated the American targeting of VTB Bank. More evidence that plodding and laborious US control measures were being neutralized before they were even in place.
Kamala’s Energy Policy enables China (thus Russia) and grievously harms America
If Kamala’s Team (I say Kamala, because she is effectively the American President since the July 21, 2024, coup replacing Biden) really wanted to restrict Russia’s war ability in Ukraine, they are acting in an irrational manner.
The Wall Street Journal had an article that encapsulated the non-sequitur of Kamala’s actions. “Oil revenue from China is propping up the Iranian and Russian economies and is undermining Western sanctions,” a quote that came from Kimberly Donovan of the Atlantic Council.
Donovan coined the term “axis of evasion,” to describe China, Russia, Iran, North Korea, and Venezuela. This alliance is using Chinese currency and payment systems which act to cushion and protect them from these sanctions that experts at the U.S. Treasury are recommending to the White House for approval.
By using the Chinese system, the forensics of financial activity is hidden from the SWIFT System – the model and standard for worldwide financial transactions.
The Cult of Green Energy that Kamala’s Team adheres to, has severely diminished American energy exports of Oil and Gas. China needs the energy, Russian and Iran need the revenue from sales to China, they are using the Chinese currency and payment systems, which has created a self-supporting, separate economic system that can breathe on its own, despite classic American control measures from the Treasury Department attempting to asphyxiate the Chinese, Russian, Iranian, North Korean, and Venezuelan system.
The Kamala Cult of Green Energy, which can’t be exported even if Green Energy worked, is behaving irrationally to defy the laws of gravity for economics. If exportable American energy was unleashed, it would displace Russian and Iranian Oil and Gas, and the American led system would have far more ability to shut down the Russian war effort.
Instead, Kamala shuts down American Energy and tries to enact financial controls on a Chinese-Russian system which is de-coupling from America. This makes no sense to any rational person.
China and Russia and others are de-coupling from American led system
One clear piece of dis-information is the term “de-coupling”. This term is normally attributed to former President Trump by the globalists and elites, but they are wrong. Nikkei Asia correctly attributes the origins of the “de-couple” expression
“It was Xi Jinping who made the first crucial statement that led to the separation of the U.S. and Chinese economies,” said a retired party veteran, noting this happened just before he (Xi) ascended to the Chinese Communist Party’s top leader.
The fact that Xi has stayed true to his original instincts shows that he is a strong-willed politician who follows through on his original intentions. Whether that is a good thing or not for the Chinese economy, is another debate.”
President Xi of China has been true to his strategy since he took power in 2012. There may have been recent statements by President Xi about de-coupling, but Xi wants de-coupling, however at his pace and his sequence. The classic American trade and financial restrictions only re-enforce Xi’s underlying vision of not having to deal with a financial and trade system controlled by America.
The Dollar is still King in the American led system, others are learning to live outside of it
Being the Reserve Currency is a good thing. The holder of this title receives preferred treatment on payments, interest rates, ease of transactions, and many other perks. It’s like having a very high credit score versus an average credit score. Although assailed by BRICS members, the Dollar is still in the driver’s seat for those staying inside the American led economic system.
A variation of BRICS is occurring which intends to not replace the Dollar led system, at least in the short term, but just operate separately from it. Russia, Iran, and China are not only using a separate financial transaction system, they are also ignoring other American dominated norms such as international maritime Automatic Identification System (AIS) to move energy how and where they see fit with a “Dark Fleet” of merchant vessels. With an undersized American Navy distracted in the Middle East, and a dysfunctional American energy policy there’s little that can be done about this.
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