New Silk Strategies had reported reported on June 16, based on news from foreign-language sources (Chinese and Arabic, respectively), that China has long had plans for investment in Syria that had been interrupted by the war but was clearly unfazed and fully expected the Assad regime to remain in place after the guns grew silent. None of this was ballyhooed in the Western press. And of course, Russia and Syria now seem poised to bring the war to a close, despite US attempts to curb their fight against terrorists.
Alistair Crooke, in an (undated) interview with Turkish news site Zaman, picked up by Russia Insider and later deleted from Zaman, said:
“Take Russia: European and American leaders thought that Russia would weaken because of sanctions and the fall of the ruble, but China intervened and stopped the collapse in the ruble. In short, China is operating as a backstop to a financial system that is in the process of shifting dramatically away from Western control. And it affects the Middle East.”
It has been suggested that if Iran rebels against the dollar and it and its trading partners then seek financing, international Banks would refuse to lend to them. But this statement by Crooke shows that there could very well be a way out. China is a wild card. Will it be played if push comes to shove? (Remember that Iran is a traditional partner of China.)
If so, the US will have lost another hand in its many hapless dealings backed only by the force of sanctions and the military – the latter of which China has recently called obsolescent methods for achieving meaningful results.
We can think of many moves where the US has overplayed its hand:
1—Its levying a fine of $8.9 billion against French bank BNP Paribas over the latter’s settling a transaction with Iran in dollars at a time when the US was sanctioning Iran even though France was not a party to an agreement to sanction Iran. This gouging by the US certainly made Europeans wary of settling transactions in dollars.
2—The US’s refusal to join the Chinese infrastructure bank AIIB at the time of its founding and when most US allies unabashedly dived in and invested in this new bank, which was seen as the anti-IMF. Though no one mentioned this, the brushing aside of US interests by US allies was a slap in Uncle Sam’s face. The US lost an opportunity to get in on the ground floor of this promising investment.
3—More recently, the US’s refusal to join China’s OBOR project, possibly the most ambitious infrastructure project ever undertaken, at a time when there is clearly money to be made in this investment.
Clues to the future of the dollar and US prestige:
So are China and Russia blood brothers or what? It’s more like this, as Crooke states in the interview:
“China understands that Russia constitutes the first domino; if Russia is to fall, China will be next.”
Further: “Nations have to go to the IMF to ask for financial help, when in difficulties, but recently it was China -- and not the IMF -- which bailed out Venezuela, Argentina and Russia as their currencies crashed. China became concerned when the ruble crashed on Dec. 16-17, and intervened to halt a run on the currency. The IMF and the World Bank were no longer at the center of the global financial order. They had been displaced by China.”
This is explosive stuff and must not be underestimated. Yet the US, jaded by decades of being at the top of the heap, simply could not conceive of the idea that they could lose their prestige and power, so they continue to bully other nations as though there is no tomorrow.
But tomorrow could be just around the corner.
Iran to suspend use of dollar in oil settlement:
Petrodollar ending? Alistair Crooke (undated)