New Wolrd Order and CRISIS
Politics / New World Order Sep 15, 2022 - 09:15 PM GMTBy: Raymond_Matison
It was back in 2006 that the foreign ministries of Brazil, Russia, India, and China first met to consider improved economic ties. Their dissatisfaction with the inability to gain increased representation at the IMF, reflecting their increasing economic contribution to the world economy, their concern - even at that time - for a stable new reserve currency, and inability to otherwise reform the IMF, led them to form what became known as the BRIC organization. With the invitation to South America to join their alliance, they became known as the BRICS nations.
In 2015, this author posted an article entitled BRICS? No, CRISIS
http://www/marketoracle.co.uk/Article53009.html which reflected on the likelihood that many other nations within South America, given an opportunity to join an alternative alliance, would revolt from their northern neighbor-controlled environment and join BRICS. Also, at the same time Iran’s news agency had announced that the country would seek to become a participant in the BRICS New Development Bank. This event, and some forward projection inspired the renaming of this alliance to CRISIS, by reordering the nations in this alliance by size and import as China, Russia, South America, Iran, and South Africa, thus creating a new acronym, CRISIS. The article cited above is still timely today, and describes the goals and hopes of a far larger global alliance, which escapes the dollar hegemony and its consequences for countries other than the old colonial powers of England, America, and Europe.
In 2022, Iran applied to become a member of BRICS, as has Argentina. In addition, the South American countries of Mexico and Venezuela and Uruguay appear to have some acknowledged interest to join this alliance, as other South or Central American countries, not desiring to provoke the United States, harbor strong latent but less public interest. One should observe that there are 19 nations in South and Central America who are part of China’s Belt and Road project.
Problematic to the present world order is the interest and possibility of Saudi Arabia and Turkey to join this alliance, which in the case of Saudi Arabia would help unravel the global Petrodollar, and do great damage to the world’s banking system which holds large sums of dollars in its required reserves, create great inflation globally due to the dollar’s reduced purchasing value, and thereby greatly weaken or collapse the global banking system. A failing Petrodollar would also destroy the Eurodollar, and bring down catastrophically equity and fixed income markets worldwide. It would bring about global de-dollarization in its most virulent form. Turkey joining BRICS could complicate America’s embarkation points for Middle East military forays. Some reading of history regarding England’s and U.S. prior capture of Iram’s oil wealth makes their application to join BRICS, and animosity to the West, very clear.
Other Middle East countries having some interest in joining the alliance include Egypt, United Arab Emirates, Syria, and Pakistan – all of which would decrease influence of England’s Mackinder thesis of controlling the world, and America’s global dominance. Finally, there is a fairly long list of other countries both in Africa and elsewhere which by joining this anti-western and anti-dollar-based alliance would be quite disruptive to the present global order.
Unquestionably, the list of countries joining BRICS will continue to grow with time. Over decades, the post WWII Bretton Woods global dollar-based organizations, IMF and World Bank have made development or currency-stabilizing loans to most countries in this world – usually with tragic longer-term consequences. As awareness of loan-dependency and underdevelopment geo-policies of the IMF and the World Bank become understood by their victims, IMF’s and World Bank’s forceful negotiations and dire consequences have become etched in the collective memories of indebted countries. The people of these countries do not forget, and they are looking for their opportunity to express their dissatisfaction by choosing this new non-dollar and non-IMF and World Bank alternative.
Countries have long memories
In his 2004 book, Confessions of an Economic Hit Man, author John Perkins notes that Jaime Roldos, president of Ecuador, and Omar Torrijos, president of Panama had died in fiery airplane crashes. He writes, “Their deaths were not accidental. They were assassinated because they opposed that fraternity of corporate, government, and banking heads whose goal is global empire.”
Economic hit men sold less developed foreign countries on large infrastructure projects such as electric generating plants, highways, ports, airports, or industrial parks. These massive loans were structured to default in a couple of years, exposing the debtor nation to loan restructuring. Presidents who saw through this scam and refused to sign on enslaving their countries were dealt with more imaginatively and forcefully.
Loan volume in South America and around the world on such projects rose dramatically in the 1960’s and 1970’s. Author David Korten, a Stanford University PhD, and Harvard faculty member, with direct experience in such projects not working as proposed, wrote a book entitled “When Corporations Rule the World” first published in 1995, with a 20th anniversary edition in 2015. All of the following paragraphs in this section and outlined in quotes are taken from Mr. Korten’s authoritative and provocative book.
He writes: “The international debt crisis of 1982 provided an opportunity to address the threat of prospective newly industrializing countries. The US dominated World Bank and International Monetary Fund moved to restructure the economies of debt-burdened Southern countries to open them to penetration by foreign corporations.”
“The reality is that most borrowing countries have been able to service existing international debts only by increasing their international borrowing.” “As real interest rates soared, it became evident that the borrowing countries were so seriously overextended that default was imminent, potentially leading to a collapse of the whole system. The World Bank and the IMF, acting as overseers of the global financial system, stepped in – much as court-appointed receivers in bankruptcy cases – to set the terms of financial settlements between virtually bankrupt countries and the international lenders.”
“Foreign aid, even grant aid, becomes actively anti-development when the proceeds are used to build a dependence on imported technology and experts, encourage import-dependent consumer lifestyles, fund waste and corruption, displace domestically produced products with imports, and drive millions of people from the lands and waters on which they depend for their livelihood. All of these are common outcomes of World Bank projects and structural adjustment programs.”
“Far from advancing universal democracy and prosperity, the true intention of “free” trade agreements is to consolidate corporate control of the world’s resources, markets, labor, and technology for short-term profits.” “Rather than increasing their self-reliance, the world’s low-income countries, under the guidance of the World Bank and the IMF, mortgage yet more of their future to the international system each year.”
“Together, the World Bank and the IMF have helped build powerful political constituencies aligned with corporate libertarianism, weakened the democratic accountability of Southern governments, usurped the functions of democratically elected officials, and removed most consequential legal and institutional barriers to the recolonization of Southern economies by transnational corporations. They have arguably done more harm to more people than any other pair of nonmilitary institutions in human history.”
“The terms of the political debate must be redefined to focus clearly on the real issue: the contest for power between the big and central and the small and local – between corporations and ordinary people. The time is ripe for a realignment of political alliances, which is likely to come into full flower only when the true populists realize that their enemy is not only big government but also the giant corporations that owe no allegiance to place, people, or human interest.” It seems that the World Economic Forum (WEF) represents this description perfectly.
In 1990, as the Soviet Union was collapsing, Russia sought America’s help to restructure to a market-oriented economy. “The governments and corporations of the West quickly reached out to urge Eastern Europe and the countries of the former Soviet Union to embrace the lessons of Western success by opening their borders and freeing their economies. Armies of Western experts were fielded to help these and other “transition states” write laws that would prepare the way for Western corporations to penetrate their economies.”
It turns out that the intent and effect of these highly qualified advisors was to further debilitate and destroy Russia in order to divide and plunder its vast natural resources. President Putin has said that trusting the United States was his greatest mistake. So, it seems that people and many countries long remember their experiences at the hands of other powers.
Last month, the US threatened African nations with sanctions, if they buy products other than grain from Russia. That should at least count as bullying; but first, let’s accurately define the word “sanctions”: it is brutal financial and economic war. Every time we, or any other country, threatens or actually sanctions another country, it is initiating and conducting a destructive war by financial means. How will African nations remember this threat? Given recent history, how should Iraqis, Afghanistanis, Syrians, and Yemenis view the West versus BRICS?
Challenges to maintaining US global hegemony
Over the last seven hundred years, Portugal, Spain, Holland, France, England, and the U.S. have in turn been global leaders. The United States, the global leader over the last century, is now in decline due to decades of confrontational geo-policies, usurping trade policies, brazen military policies, unbalanced budgets, mountainous but still rising debt, and bankrupting monetary practices.
There are many challengers to the present rules-based leadership order, among which is the globalist vision promoted by the WEF and its borderless giant corporations; the BRICS growing list of nations and their increasing economic and combined military heft; and the techno libertarians who have invented the means of permissionless transfer of both government and private money, and increasing awareness of people for governments to limiting currency and debt expansion. One also should consider the most common cause of an empire’s decline, which is internal corruption, entitlement, cronyism, and governing politician leader rot; but since this is a destructive force rather than a centralized takeover movement, it suffices that it is simply acknowledged.
The challenge of the WEF and its centralized, ideologically communist, globalist corporate leaders can be dismissed, simply because seven billion world citizens will not remain idle or permit about two thousand corporate leaders to control or dictate to the world their thesis - that at the hands of these globalists “we will own nothing and be happy”. With great irony it is observed that these policies come from a group of individuals which arguably are the greatest capitalists on the planet.
Since the growth of the CRISIS alliance, the world has been experiencing decentralization, which is continuing and growing. Also, the global virus crisis of the last several years has convinced many governments that centralized manufacturing and supply of vaccines and other vital products is not a prudent policy. The solution to this problem is decentralization, and more localized manufacture, reducing dependance on foreign sourcing of products.
The CRISIS nations’ challenge
The challenge of the non-western world which encompasses China, Russia and other nations which are joining the group of the CRISIS alliance is real, and has been emerging quietly for decades. These countries have not sought dominance, but rather escape or relief from the present world order dominance and its required tribute of materials, labor and manufactured goods to the hegemon in exchange for printed unbacked paper currency, increasingly of questionable value. This transition to a multipolar world order is happening now, and may take several more decades to be completed; however, the next global leader will not be a single country, but rather an alliance. That will constitute an important change from a unipolar to a multipolar World Order.
Hopefully, such a transition will not take place via military conflict or nuclear war, which would be tragic for the global populace – since it could be triggered through a belligerent action of any one country, or a false flag operation. However, it remains more likely that this transition will take place with the implementation of new global money payment systems, and a transition to digital currencies.
Back in 2015, China was testing its China International Payments System (CIPS) as an alternative to the West’s cross-border payment messaging system (SWIFT), while Russia was building its version of a SWIFT alternative (SPFS) to nullify the potential sanctions (financial war) of the U.S. dominated SWIFT system. See: CIPS, Not the Petrodollar is Key: http://www.marketoracle.co.uk/Article53747.html Both of these alternative trade settlement systems now have hundreds of bank members, and therefore appear as regionally operational. However, the greatest challenge to the West comes from the confluence of BRICS/CRISIS and the digital currency revolution.
The tecno-libertarians
The third group of challengers, represents an unwitting group of techno-wise libertarian-oriented computer and programing specialists who have given us the internet, and now are prodding the world to accept and use digital assets, cashless currencies, and direct permissionless payment systems. This evolution is global, irreversible, and will likely be more profound than anything else in our history. However, it is highly doubtful that these techno specialists ever intended for their technology to overtly take over the present world order.
As the world transitions from fiat, debt-based money, to a new financial system using blockchain, digital currency may be structured to become commodity asset-based. China is leading this transition globally with its Digital Currency/Electronic Payments (DC/EP) system, which is at times is incorrectly labeled a Central Bank Digital Currency (CBDC). According to Richard Turrin, author of the highly informative book titled “Cashless, China’s Digital Currency Revolution” published in 2021, several hundred million people in China – the equal to the total population of the United States - are already using this next-generation payment system.
China’s Central Bank issues its currency to its commercial banks, which in turn distributes it to consumers. This approach extends relevance to commercial banks, and obviates the need for its Central Bank to deal with retail customers. Rather than using a distributed ledger blockchain system, it utilizes a more traditional, centralized and faster processing system comparable to those used by credit card companies. Because the currency is tokenized, rather than shifting balances in banks, it operates similar to cash. By comparison, the US is still in a planning stage for its transition to a digital currency, and as regulations for digital assets have not been enacted, we are five to ten years behind the adoption curve when compared to China – a loss of leadership that likely cannot be recovered.
This delay in providing clear legal guidelines for digital assets is likely related to the government’s desperate need for more tax revenue, and to reduce our gigantic and unsustainable budget deficit. This is also the reason for the recently passed legislation to massively increase the number of IRS personnel by 87,000 agents. Unfortunately, this tax revenue need has obscured legislator vision, for it wants to classify this new digital currency asset class as commodities, which can be taxed, rather than currencies which are not taxed. Yet, at the same time the world’s central banks seek to issue CBDC’s, central bank digital currencies. Of course, government, the FED and the banking system will seek to destroy any private non-inflating or commodity backed currencies in order to maintain absolute control over citizens. That, of course, is hardly a government by the people, of the people, or for the people.
China’s fast adoption of digital currency reduces transaction costs and creates efficiencies that are quite positive for its economy. However, as Mr.Turrin explains in his book, this advantage has little effect on the rest of the world until this new electronic currency payments system is used for trade outside China’s borders. As it increases cross border trade, first with its nearby friendly nations, and after some years perhaps globally, their trade will be increasingly conducted in their currency decreasing the need to use dollars. This reduction in demand for dollars will reduce its value, and establish the renminbi over a period of time as an alternate reserve currency. That in short, is the global reset, and is the nature of the new world order.
The West is already fighting back by using its geopolitical go-to responses, and fearing loss of empire, it is using increasingly desperate and risky measures. The attempt to prod Ukraine to become a member of NATO got the expected response from Russia which, in order to protect its borders has invaded Ukraine. Billions of dollars and weapons are coming from the US and Europe in support of this proxy war to weaken Russia and maintain America’s hegemony. Such a proxy strategy was used before, when rather than conducting direct military operations against Iran, we prodded Iraq to attack Iran, and then in turn supported both Iraq and Iran in their war in the 1980’s, by briefly supporting the losing side in order to bleed and weaken both, thereby maintaining our primacy. In addition, since Russian reduction in oil and gas supply to Europe was also a foreseeable response to the US and its NATO sponsored action, sanctions has allowed us to sell gas to Europe at higher prices, and weapons to distraught nations. Compliments to the strategists of this grandmaster political chess game.
The singular move that appears to have been a mistake in this deadly game is the sanctioned freezing of Russia’s several hundred billion dollar’s-worth of forex reserves, for this strategically ill-advised overreaching has alerted other countries such as China, that their holdings of USD could be frozen or otherwise nullified. Indeed, this misstep alerted the rest of the world that they cannot trust the US, and therefore must seek an alternative to its global dollar reserve status.
Important consequences of this action are that the BRICS nations have announced their intent to create an alternative reserve currency, and Russia is also setting up a new gold exchange in Moscow (Moscow World Standard) to provide an alternative to the London Bullion Market Association (LBMA), a gold bullion market. It appears that Russia and Iran are creating a new global natural gas cartel; while Russia, Saudi Arabia, and Iran could form a new global energy cartel. Finally, it has also coalesced nations to join the BRICS alliance and their development bank alternatives, so that combined CRISIS countries have now become our nation’s primacy crisis.
Of course, the Russia/Ukrainian war could have been totally avoided by Ukraine simply announcing that it would not seek to join NATO, or NATO announcing that they would not accept Ukraine as a member, or America not prodding Ukraine into their latest proxy war which it has tried to do since 2008. This would have avoided the economic and physical calamity to Ukraine, Europe and humanity beyond, which now results from war, food and energy shortages. It may still be possible to avoid this certain calamity, by not crossing Russia’s red line and satisfying its national security concerns, by announcing and denying Ukraine membership in NATO. This decision will require politicians to face reality, rather than to play energy, food, and commodities make believe as winter approaches.
End game
We must realize that an important and significant part of the world no longer wants the West’s dollar reserve currency, its Petrodollar, Eurodollar, or its IMF, World Bank, NAFTA, WTO, and APEC organizations, as they are now seen to open countries to economic and financial exploitation. They oppose the questionable climate change activism and its program, for it asks them to eliminate carbon fuel, which would destroy the revenues of the Middle-East oil producing nations rendering them poor. By limiting carbon-based fuel to third-world nations would keep them both undeveloped and poor. It would also destroy revenues and power of Russia, weaken Saudi Arabia and Iran, rendering non-western energy countries inconsequential. This is the real geopolitical subterfuge of global climate change. To the extent that the West is now willing to commit trillions of dollars toward the elimination of carbon fuels, it is underwriting its own demise. True transition from carbon-based fuels willcome from technological advances in nuclear, including fusion power, not active suppression of carbon fuels at this time.
The trillions of newly issued dollars in the last decade, and particularly over the last wo years two years is dangerously accelerating globally persistent inflation. Mr. Powell, Chairman of the FED has stated “I believe that the high inflation in the United States is a product of high demand, and constrained supply.” You, Mr. Powell, do deserve the credit of being intelligent, and therefore, you know that the previous statement is not true. It is persistent money printing, since the foundation of the FED that has caused price inflation, and reduced the purchasing power of the dollar by 99%. Continued monetary printing will destroy our currency, while raising interest rates will cripple and then destroy the economy by increasing government and consumer debt borrowing costs. In plainer words: it’s “tilt” – game over!
The trillions of dollar issuance, cited above, is necessitated by uncontrolled government spending, mostly war related and to maintaining our global hegemony, which requires persistent ballooning debt. The nation’s leaders have forgotten how the nation rose to global power. During WWI and WWII, the nation manufactured war materials and other goods which were sold for gold to the belligerents, allowing it to accumulate the greatest pile of gold in the world, making America a global financial and industrial power. It entered these wars late, after both sides had bled and weakened, and thereby also became the world’s prime military power. Since then, it has initiated expensive and destructive wars of its own choosing without decided winning outcomes, wasted gold and fortune, as manufacturing has been outsourced to China. During recent decades, the US has indebted itself to conduct wars, as over these same decades China has become the major producer of goods, builder of infrastructure, and it has abstained from financially ruinous wars. China and Russia have been mining, buying and hoarding gold, as America’s stash, even after closing of our gold window, is in doubt as government leased gold is not the same as holding gold, and no audit of the nation’s gold has taken place since the 1950’s. Given these facts, it is not difficult to predict which nation(s) are in ascendancy, and which are in decline.
As the present financial and economic system is not capable of sustaining itself, the U.S. must position itself in the best way possible for the necessary reset of the global monetary system. The U.S. and the West, and Russia, China and the East, the IMF, WEF, BIS (Bank of International Settlements), and lesser powers each have their preferred outcomes. The non-western world is clamoring for de-dollarization, which hopefully comes without military conflict, but rather conveniently comes from technological innovation – in the form of permissionless, digital currencies. However, since the technology-driven money revolution of historical proportions is now taking place, surprising disintermediation of even established powers may result. It will also cause great destruction of “old money” wealth and power, and create great wealth for the new digital money, decentralization technocrats.
Russia and India no longer need the dollar for trade settlement. They don’t need to use SWIFT, as they can use CIPS or the SPFS system, and may soon use digital payments and settlement systems. The CRISIS countries, in creating a new reserve currency, could structure it similar to the SDR as a basket of currencies, without any one country needing to be exposed to the Triffin dilemma, or it could be based on individual country digital currencies, and could be gold backed. The US dollar, while in a slow decline for years, and for reasons previously explained, can no longer regain its former status - for since the ruble freeze, no country can trust the US dollar or its monetary weaponization.
Over the last seven hundred years no global leading country has learned the secret of lasting global leadership, as past empires have lasted about a hundred years. It seems that the formula of centralization, military might, fiat money, and dictating to its own citizenry or the rest of the world does not work for much longer than a century. It remains to be seen whether different cultures can promote supportive, unifying concepts to global leadership that would allow the coming multi-polar leadership to survive longer. In the longer term, continuously advancing technology is auspicious and bright for humanity; however, shorter term we will need to pass through our current recession, and depression – which according to John Maynard Keynes is “a chronic condition of sub normal activity for a considerable period without any marked tendency either towards recovery or towards complete collapse.” Unfortunately, our country must now reap what it has sown over decades.
However, no tears need to be shed, as we all have benefited from our global leadership of this American Century. America has been a steadfast promoter of democracy, and vanquished destructive Fascism, and enslaving Communism. Electricity, safe drinking water, autos, air travel, food adequacy are all global results and pillars of our century of dominance. The technological developments and products of this last century, including America’s development of diodes leading to semiconductors and computers, the internet, smart phones, moon landing, and exploration of our planetary system is all simply breathtaking! As this global leader has now passed the century mark, it is time for it to recede from its leading position; to sort of retire, but continue to provide advice and guidance for future evolution of our world – while counting our present blessings.
Raymond Matison
Mr. Matison was an Institutional Investor magazine top ten financial analyst of the insurance industry, founded Kidder Peabody’s investment banking activities in the insurance industry, and was a Director, Investment Banking in Merrill Lynch Capital Markets. He can be e-mailed at rmatison@msn.com
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