THE SITUATION AS WE SEE IT
Some time back we reported that China (along with its BRICS friends) were setting-up mirror organizations to the International Monetary Fund and the World Bank (see The Economic Side Of TEOTWAWKI). At the time of our post the formal names of those organizations had not yet been defined. That was then and this is today. Please welcome the Asian Infrastructure Investment Bank (AIIB) to the world scene of international banking. As we mentioned in our previous article, this-new-and-improved Chinese World Bank will serve to extend China's reach and influence but it will also server to intensify global economic boosts and booms. But something else will happen. It will weaken the US influence throughout the world by making the USD less of an international currency.
Why is this important?
Because the most powerful tool in the US arsenal is the fact that they can print USD with almost complete impunity. We commented on this point some time ago (see Why The USA Is And Is Not Important) where we pointed out the fact that US's political and military power has a weak underbelly: its economic power. Money makes peddling political views possible and money makes pushing and punishing with military power possible. No money no funny games. This is slowly but surely becoming a reality. The US is on its way towards being no more "the" superpower.
ABANDON SHIP!
Almost. The original AIIB (when it had no name) was shunned by almost all countries but something funny happened on the way to the bank. Countries began to realize that they were overdrafted. And what do you do when you are broke and overdrafted? You seek the help of a "friend"… of sorts. Enter money-rich China (at least on the surface - again, see The Economic Side Of TEOTWAWKI).
Slowly but surely most countries that can be classified as nobodies stepped into the line begging for donations. They included Bangladesh, Brunei, Cambodia, Indonesia, Jordan, Kazakhstan. Laos, Malaysia, Maldives, Mongolia, Myanmar, Nepal, Oman, Pakistan, Philippines, Singapore, Sri Lanka, Tajikistan, Thailand, Uzbekistan and Vietnam.
Up to then it seemed as if the Chinese strategy wasn't working. But the Chinese are anything if not persistent and with a very long view. Eventually things began to move. Countries who (arguably) had very little to gain joined the club. They were: India, Kuwait, New Zealand, Qatar and Saudi Arabia. The tide was beginning to turn.
Eventually, the big players stepped into the game. France, Germany, Italy, Luxemburg and United Kingdom saw the light and jumped into the boat in 2015.
And what happened with the original World Bank? It still exists but it is now being shunned. The rats are beginning to smell the holes in the keel of the USD ship as it begins to sink. Abandon ship! Now! Now! Now! Well… almost.
THE SOCIOPATH AMONGST US
Some people are of the opinion that this change will most definitively be for the best. And they are in error. They point to the fact that over the last 20+ years the US has been behaving as a sociopath and this evolving situation will make matters more difficult. Examples include:
- FACTA (Foreign Account Tax Compliance Act) which forces all banks anywhere in the world to become extensions of the US Internal Revenue Service. This was accomplished through blackmail by threatening countries to cut them off from SWIFT (the money electronic transfer system).
- Punishment of banks acting legally such as the 9 billion fine to the French BNP Paribas for conducting business with Cuba (a completely legal process under French law)
- Widespread aggressive military campaigns overt and covert, many of which were fully executed for the benefit of few US corporations.
- Constant -destructive- interference with world affairs should these affairs not meet the current US political agenda.
- Flooding the world with worthless USD.
And so on.
This is not the behaviour of a friend and ally, but the behaviour of a schizophrenic sociopath who uses blackmail, intimidation and extortion to achieve its goals. People understood this long time ago, but now politicians are beginning to understand it too.
However, we need to clarify our remarks. The issue is not that the US is finally been seen for what it really is, unmasked by the oppression it inflicted over poor, poor, freedom loving, harmless countries. Not a chance. Every single one of those poor, poor, freedom loving, harmless countries has had its day under the sun and they behaved equally sociopathically as the US. What is different now is that the US has been behaving as such at a global level. Very few (if any) of the "smaller" players had such reach. It is simply a matter of kilometers and not a degree of sickness.
THE END IS NEAR
Well… not really. What is happening at a political and military level throughout the world is now also happening at the economic level. We are entering into the realm of a multi-polar economic world. What this means is that yes, the US and the USD will progressively become shunned and other currencies such as the EUR but more likely the RMB (Renminbi) will begin its ascent. But the situation is going to be messy. Very messy. As our numbers indicate through our indicators (see Default Indices) almost all countries are deeply indebted. And what happens when countries are deeply indebted? You are right! The make use of the unholy trinity, they tax, borrow and print. And what happens when this is put into practice? Currency wars (see for example Currency Wars II and The Beginning Of Cryptocurrency Wars).
BEHAVE!
Most people are clueless about this process but a tiny minority are aware of it. They believe that this will bring a little bit of much needed relief to regular people just like you or us. Not a chance. This is not going to be a repeat of the balance of propaganda as it occurred in the cold war.
During the cold war both, the USSR and the US behaved "properly" at least from their frontiers out. This was so because they knew that any hiccup would be used by their enemy for political gains through propaganda. Hence, the US dared not turn to the right in political matters (as it now has) or religion (as it now has) all the while turning to the left in economic matters (as it now has). The same happened in the USSR. There was a balance of movements, a détente of sorts prompted by PR MAD (Public Relations Mutual Assured Destruction).
This is not the case today. None of the big players cares about PR because this Cold War is about money, not ideology. As such countries (big and small) are free to continue plundering your wealth. From their point of view there is very little to be had by behaving. Besides, all the wealth extraction systems are already in place and operational, which means that all governments are already addicted to them. They simply cannot stop even if they would want to.
Therefore there is not going to be any massive, tangible benefit in this process. There is not going to be a "détente dividend".
IT'S GOING TO BE A BETTER WORLD, RIGHT?
Not a chance. If you thought that things in general will turn for the better, you are out of touch with reality. The Chinese goal is world domination, pure and simple (see The Great Chinese End Game). The exact details of their master plan are not yet visible, but for the looks of it, they will be using the URRS's approach. This is, the radish paradigm. Red on the outside and white in the inside. It would seem that the Chinese are not trying to convert or conquest countries outright, but simply to make them behave as China wants. Chinese people don't seem to care if these countries behave as directed because they bowed to the Chinese leadership or if they are doing so because they are convinced that the Chinese model is superior. The Chinese goal is not to "influence" countries but to control them. This idea is as old as history itself. Every single "empire" in the world had the same goal. The Chinese are only the latest newcomers.
As such we are now faced with two large, active sociopathic countries instead of one. Three, if you add Russia. How can you possibly believe that in these conditions things "will get better"? They won't. Now is the time to build your proverbial survival shelter, jump into it and close down all the hatches. It's going to be ugly out there, very, very ugly.
CONCLUSION
The fact that the AIIB is beginning to take shape only implies more troubles for us, the people. For some countries (read politicians) it will be a bonanza. For some others it will be a disaster. What is going to be for you, it is almost too easy to forecast: it is going to be bad.
The point of the matter is that politicians want to be in a "growth economy" which means to expand their power. In this process you don't count at all. You are a non-event. You are cannon fodder. But there are always naysayers. Those who believe that this newfound "cooperation" among countries will usher a new era of peace, wealth and prosperity. Fair enough. Just one thing, when all that new "cooperation" finishes destroying the economy you depend on, don't tell us we didn't give you the chance to change this outcome. We told you so. In advance. There! Your choice.
Note: please see the Glossary if you are unfamiliar with certain words.
