Russia/China Dump The Petro-Dollar But Will The US Go Quietly?
Russia has finally called the bluff of the US and EU geopolitical maneuverings and sanctions over their support for the groups resisting the armed takeover of the Kiev government in Ukraine and it doesn’t look good for the US economy, and hence does not look good for a peaceful resolution by the US and some of it’s more strident European partners.
Russia’s largest news agency has just announced that the Russian oil and gas supplier Gazprom Nef has taken the final step, which was planned but never executed earlier this year, to stop trading in petro-dollars. It will now do it’s business in Rubles or Yuan when trading with the rest of the world, including Europe who are still dependent on Russian fossil fuels.
Russia, China, India, and Iran have already in place trade deals using their own currencies rather than the (US$) world reserve currency, so this is going to have another very serious effect on the US economy which has for decades used it’s reserve status to bolster its currency and economy, selling it’s debt to countries who trade in dollars. The US already runs a trillion dollar a year deficit and a $13 trillion debt (greater than it’s GDP) and the FED is still buying up it’s own debt by printing money, (which also devalues the debt previously sold).
This move by Russia and it’s trading partners could spell the beginning of the end of US global hegemony and the crippling of their economy, which for decades has been supported by exporting their inflation to the rest of the world through this mechanism. There are plenty of countries around the world, including those mentioned, and a large South American group who are already on board, and some in Europe who are hedging their bets, including big players like Germany who are trying to maintain closer links with Russia.
The difficulty we now face is whether the US will change the way it does business with the rest of the world quietly or, as we have seen throughout history at times of economic depression, will the US and whatever allies it holds on to go to war to maintain it’s unfair economic global advantage. All the recent signs are that the latter is the case but that depends on public opinion which is already weary after a century of constant war.
Europe’s Russian gas dependency has been one of the main issues in the EU’s wavering support of US global policy. In an attempt to harden EU support we have seen western backed militias attempted usurpation of Syria in an effort to lessen that dependency, because by taking control of that region they can then run the Arabian pipeline through Syria to Europe, something the Syrians have always resisted, resulting in this 3 years campaign to undermine the country. Success in taking over Syria may now be seen as essential by the US to stop the European countries one by one abandoning support for it’s economicly advantaged position in the world. To that end it seems apparent that the current northern Iraq issue may well have been exploited by the US and UK to intervene directly in northern Syria themselves, where their militias have failed.
Similarly in Ukraine one of the first political acts of the western backed armed group that took over Kiev was to announce contracts to western companies to extract shale gas, something the elected Ukrainian government had also refused to do for environmental reasons.
So when DDI look at international politics we like to see the whole picture and to inform the public of the true nature and causes of the humanitarian disasters we see; issues that our current government choose not to explain. Knowledge is power, and power belongs to the people of Ireland to make the correct decisions based on full information, not executive decisions painted with politically edited soundbites. In light of this extremely important development we call on the government to make a statement on the issue and on Ireland’s position in support of fair trade over military intervention.