The article below is a very excellent article. It clearly describes the situation where and why Russia and China are rapidly getting out of the US dollar hegemony.
Mr. Peter Koenig who gives commentary is an economic scientist and expert at geopolitics, and the former World Bank staff. It is quite interesting to know that exposition by the person who knows about business and financial world far better than anyone else is completely the same as the recognition so-called conspiracy theorists have.
Mr. Koenig says that the entire western monetary system is basically “a fraud.” He points out that the entire international payment system is controlled by the FED, which is totally privately owned, and the BIS. Such organization should not be privately owned. It is just common sense.
Furthermore, “as long as the western dollar-based monetary system has supremacy on the world markets,” the world is forced to obey the order from the U.S.
The article calls this “the U.S. imposed totally illegal rule.” When the convertibility of the U.S. dollar into gold was lost in the Nixon Shock, the U.S. and Saudi Arabia singed a secret agreement and made rules on their own for payment for petroleum in U.S. dollars. In return, the U.S. protected the Saudi royal family with its military power. This secret agreement made it possible to maintain the hegemony of the U.S. dollar as international settlement currency.
After the Nixon Shock, global currency is essentially mere a piece of paper. However, only dollar is supported by petroleum and other currencies can indirectly maintain the value as currency with convertibility to the dollar.
Such being the case, if payment for petroleum in rubles or in Yuan is possible, it means that the U.S. would lose its position as hegemony. However, as described at the beginning of the article, as long as “both currencies the ruble and the Yuan are 100% covered by gold,” undoubtedly the world will make a transition to a multipolar world.
There are phrases in the latter half of the article: “it should be the economy of a nation or a region that makes and backs the monetary system” and “it will not be gold or other minerals that back a monetary system, but the economy itself.” I quite agree with this opinion. I remember mentioning it on this blog.
I mentioned that a new financial system backed by gold will be temporary and it will be supported by GDP of each country in the future. The problem is, however, that the current GDP growth rate has many defects and self-sufficiency economy is not reflected in GDP. Therefore, this article says: “The strength of an economy will be determined by indicators well beyond the linear GDP.”
I thought that mathematicians and others should work together to improve how to calculate GDP so that GDP can be calculated accurately. I can really understand what Mr. Koenig points out.
I think that when there is no war on Earth and nobody suffers from hunger with construction of right banking system in the future, currency will naturally disappear from Earth. In such an era, people will not get conscious about monopolizing all fascinating things, and instead they will produce something wonderful by themselves. In other words, I believe that people will change in such awareness that they put more value on creation of something wonderful or beautiful than on possession of it.
September 17, 2017
Shanti-phula has indicated some parts of the following text in black boldface type or in red letters.
Excerpt from a Japanese article: Overseas Articles Never Reported by Mass Media
– September 17, 2017 –
Gold Trade Between Russia and China – A Step Closer Towards De-Dollarization?
Transcript of Sputnik, Skype Interview, 6 September 2017
By Peter Koenig and Sputnik
Global Research, September 07, 2017
Peter Koenig: <snip> Let’s not forget, both currencies the ruble and the Yuan are 100% covered by gold; actually, the ruble is backed about twice by gold. <snip> … Russia and China as well as the entire Shanghai Cooperation Organization (SCO), are rapidly moving out of the US dollar hegemony.
Let’s face it, the entire western monetary system is basically a fraud. It is privately made and privately owned, with the entire international payment system being controlled by the FED – which is totally privately owned – and the BIS (Bank for International Settlement, in Basle, Switzerland – also called the central bank of centrals banks). All international transfers and payments have to transit through Wall Street banks. This is the only reason why the US can “sanction” countries that do not behave according to Washington’s dictate. It is illegal, and would not stand up before any international law.
But since international courts are also controlled by Washington – there is no chance that the US will be called to account for their criminal economic actions around the world – at least not for now; at least not as long as the western dollar-based monetary system has supremacy on the world markets.
This US imposed ‘rule’ – totally illegal – allowed the US Treasury to print dollars indiscriminately, because the world needed dollars to pay for their energy.
The western economy today and for the last at least 100 years has been based on a fraudulent, debt-driven privately-owned and manipulated monetary system – on fiat money. When in reality, it should be the economy of a nation or a region that makes and backs the monetary system.
If I may, I predict that in the foreseeable future, it will not be gold or other minerals that back a monetary system, but the economy itself; the strength of a country’s – or association of countries’ – socioeconomy that determines the monetary system. The strength of an economy will be determined by indicators well beyond the linear GDP; they will include societal values, such as education, health services, and behavioral values, like how a society deals with the environment, natural resources and conflict resolutions.
This is what I believe the new Eastern Economy, based on China and Russia – the Economy of Peace – will offer to the world as an alternative.
(The rest is omitted)