Things are heading towards the Third World War

Moscow and Beijing are trying to keep the events only within the economic framework. But whether it will work is still an open question
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print 26 3 2021
 

The need to separate Russia from the Western world has been discussed for a long time and a lot. In this sense, the speech of Russian Foreign Minister Sergey Lavrov about the need for Russia's early exit from the economic mechanisms created by the West does not look like anything special. Except for one detail. The Russian Foreign Minister directly noted that it is not about "maybe or someday", but specifically about "right now". This becomes the main starting point of what is happening.

The question is not about the final destruction of political relations between Russia and the West, and not even that what happened is the result of the actions of the American and European establishment. The fact is that the entire global economy is overwhelmingly based on traditional Western mechanisms.

This is not just the dollar, which is denominated in more than 60% of the $360.6 trillion of total global wealth, according to the Global Wealth Report 2019 of the Swiss bank Credit Suisse. This is another 92% of the $6 billion daily volume of oil trade and more than 72% of the total turnover of world trade in all existing types of raw materials on the planet.

Simply because it happened as a result of the Bretton Woods Agreement, which made the US dollar the main fundamental currency of all countries of the world. Accordingly, the entire financial system of the world was formed on the basis of the unconditional American bureaucratic dominance.

According to SWIFT, 45.58% of all international payments in 2020 were ultimately made through the US dollar. Another 36.75% occurred through the euro. In fact, America's current attack on Europe began precisely for the sake of absorbing the share of the euro into the world of the dollar.

In general, if to look at the statistics superficially, American economic power looks indestructible, which gives overseas politicians a sense of the unconditional nature of their absolute dominance, which allows them to punish the objectionable by simply "disconnecting from access to paradise". But the real state of affairs looks somewhat different.

For example, out of the above-mentioned $6 billion of the daily turnover of the world oil trade, the real share of the United States (domestic consumption plus American oil exports) is only $1.33 billion, and, say, China produces and consumes oil at $0.921 billion per day. Thus, if to cancel the rule of mandatory oil trading exclusively for the US dollar, its demand in the industry will simultaneously fall by 78%.

According to the estimates of Trading Economics, which in turn are based on the data of the US Federal Reserve, in November 2020, the indicator of ordinary dollar cash, i.e., the aggregator M0, was more than $5 trillion. From this, 3.1 trillion is located outside of America. For example, the cash dollar reserves of Russian citizens are estimated by the Bank of Russia at 40 billion rubles.

If we add to the MO component funds in current bank accounts, i.e. non-cash money in operational circulation in the world, as well as short-term deposits and balances in mutual fund accounts, we get an aggregator M2, the volume of which reaches $19 trillion.

To make it clearer, these figures should be built in a consistent relationship. The US Federal Reserve has issued $5 trillion worth of "notes with presidents", taking into account the non-cash dollars in constant circulation, US money in the world system is only 19 trillion, but they provide the United States with the ability to control four-fifths of all international trade settlements for literally everything, and nominate 216 trillion of the world's total wealth in these unsecured wrappers.

So there is power. Recently, the leading German economist and political scientist Alexander Rahr stated a sad fact: the European Union has lost the ability to conduct an independent foreign policy. It would seem: why?

Yes, the US consumer market is important for the EU and the only one where foreign trade has a positive balance for Europe. But the American direction accounts for only 8.64% of Germany's exports (the EU's leading exporter), while 7.97% of German goods and services go to China, 7.5% to France, and 6.4% to the Netherlands. Why can't Germany (more broadly, the entire European Union as a whole) insist on Washington's non-interference in internal German and intra-European affairs?

It's simple. Because from 60 to 85% of short-term loans to support the day-to-day operations of European businesses, especially large and ultra-large ones, are received (drumroll!) from the United States.

In August 2018, the US Treasury clearly, almost on the fingers, explained to the board of directors of the French company Total that if it does not immediately abandon all projects in Iran and leave the country, then ... more than 40% of its board of directors is occupied by representatives of American investment funds, and 82% of Total's operating capital is occupied in the US credit market. What is more important for Total: to keep the corporate business or to go on principle for the sake of 700 million already invested in Iranian projects, which promised about $5 billion in revenue in the next five years?

The French took the hint correctly. And not just them. BASF, which was going to invest about $2.2 billion and receive $6 billion, also curtailed its activities in Iran. Many others have also left Iran. Similarly, the United States is now "putting Europe in a comfortable position" in relation to the Russian gas project "Nord Stream – 2".

And this power was put in jeopardy by Sergey Lavrov's statement. While the American elites fought within themselves for access to the supreme power, Russia and China gradually formed their own alternative mechanisms of economic interaction. Both among themselves and with other important trading directions for themselves.

For example, in 2014, Russia presented its own system for transmitting financial messages. Back then, it was met abroad with homeric laughter from the American financial elites. What can a country that barely pulls 4% of the world's total GDP do against the really "serious guys"?

However, by February 2021, it turned out that the Russian SPFS already covers 23 countries, including Germany, Switzerland, Kazakhstan and Belarus, and it employs more than 11,000 large financial organisations of the world. I.e., in principle, Russia can do without SWIFT right now. It won't be easy, but technically the task is already solvable.

The situation in China is very similar. Its sovereign SWIFT counterpart, the Chinese International Payment System (CIPS), was launched in October 2015, with a ceremonial transfer of a yuan payment from China to Luxembourg to an IKEA account. Today, the Chinese system is successfully operating in 31 countries. It is used by the Chinese branches of CITIBANK, Standard Chartered Bank, JPMorgan Chase Bank, Bank of Tokyo-Mitsubishi UFJ or Deutsche Bank.

When Sergey Lavrov said that America today "produces nothing but democracy," he pointed to a simple and self-evident fact. American dominance today is increasingly based only on the established habit of the peoples of the world to obey the United States simply because America is considered the traditional leader of the planet. And with this habit, it's time to end.

Not out of spite or stubbornness. Simply, as the economic degradation has reached a critical point, the degradation of the elementary adequacy of the behaviour of the American ruling elite has also reached a critical point. They forgot that the leadership of the United States was won not so much by the bayonets of the Marines or the strikes of the carrier-based aircraft of the American fleet, but by the partners receiving tangible benefits from cooperation with the United States and playing specifically according to American rules. Financial or democratic - it isn’t so important. The most important thing is that they’re American.

Now following them for partners carries direct and obvious losses. Washington does not just ignore anyone's national interests on the planet, it demonstrates an unconditional confidence in the absoluteness of its own right to completely ignore any interests other than its own. It makes no difference to whom, allies or opponents. Just as they are no longer interested in the degree of weight of the justification of their own position. In order to demonise the enemy, they do not consider it shameful to use even direct deception.

This is certainly not the first time - the Americans have not found any signs of the presence, or at least attempts to create, weapons of mass destruction in Iraq to this day. But then Washington at least tried to pretend that the real evidence of his accusations really exists, and today it directly invents them and does not hesitate to admit their fakeness.

The White House still talks about Russian interference in the 2020 presidential election as a reliable fact, although its own official investigation directly refuted this, and even found those who voiced this nonsense for the first time.

In general, the situation is such that for Russia and China it becomes toxic even to continue to remain inside the Western financial and economic mechanisms due to the sharply increasing threat of their use by the Americans in order to inflict the "enemy" the maximum possible financial and economic damage.

It means that the most reasonable next step is to get out of them as quickly as possible. Everything points to this today. Political relations with the United States are completely destroyed, and European politics is moving towards a similar state with a reactive speed.

More precisely, it has already come, since Lavrov's more than transparent speech about the approaching rupture of Russia's political relations with the EU in Brussels was not just ignored, its grounds were simply not understood there. At all. They say that they profess five basic principles that Russia has violated, so the result is not the EU's problem.

 

Previously, somewhere before 2006-2010, it was still possible to engage in self-deception, consoling yourself with the hope that the economy is, as it were, outside of politics. But what has been happening over the past two years has shown the fallacy of such ideas with all the persuasiveness.

This leads to a simple conclusion. Russia and China no longer have any other options but to actively and completely withdraw from Western economic mechanisms, from the WTO to SWIFT. While the United States has no choice but to force us to remain in them by force, including military force. Otherwise, the economic and political collapse is expected by the United States itself.

This arrangement, everywhere and always, ended only in war. Given the scale of the opposing systems, a world one. Only its shape remains uncertain now. Moscow and Beijing are trying to keep the events only within the economic framework. But whether this will work is still an open question.

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