Recently the western media, namely The Financial Times, have found out that Gazprom and other Russian-state companies are switching their export operations to yuans and rubles. The most common reaction was that Gazprom is trying to do something stupid and unachievable.

Peter Koenig, financial pundit, former World Bank staff and a Voice of Russia regular, told about the hottest trend of global finance: de-dollarization. He also commented on the financial blowback and unintended consequences of the US sanctions and hostile actions against countries in Europe and South America. 

“The move towards trading in other currencies than US dollars is not stupid at all,” he argued. “It’s an excellent idea. The fact that Gazprom and other Russian and Chinese companies are initiating this de-dollarization action is even better. Why? Because it will lay a solid ground and trust for international trading in non-dollar currencies. There are many BRICS and other countries just waiting for somebody to make the first move.”

Peter Koenig also added that these countries are all afraid of ‘sanctions’ and don’t dare stepping out of Washington’s line of command, unless they have another strong leader to make the first move – a strong leader like Russia or China, and if combined, it’s even better. Let’s not forget, he added, that China’s economy has just surpassed that of the United States and is now the largest and strongest in the world.

“By and large, the combination of Ruble and Yuan may soon become one currency – maybe the ‘Yuanru ’ or the ‘Ruyuan ’ – that could substitute for the dollar as a reserve currency and eventually together with other international trading currencies like the Euro, replace the dollar altogether,”he said.

“Ideally, the BRICS and BRICS-associate candidates, at least a dozen countries are on that list, would issue a common currency, based on a weighted average of their economic output, a basket of currencies, similar to the SDR – Special Drawing Rights – used among other currencies by the IMF to indebt countries with their so-called ‘rescue packages’. Greece is an example this IMF strategy, among other southern European states. Greece has become Europe’s basket case and Ukraine is on the best way to become another one very soon.”

Alexey Kostin, the head of VTB, the Russian state-owned bank that pioneered ruble-yuan trading, told the press that as a result of the US attack on BNP Paribas, the French central bank is now actively seeking to bypass the dollar and institute direct euro-yuan settlement for the French import and export operations.

Peter Koenig commented on the shameless boldness of US institutions, lately US courts.

“After Argentina had reached tacit agreements with its creditors in the early 2000’s to settle it’s mostly Washington – imposed debt, largely accumulated in 1990s, at about 25 cents on the dollar, a US court had recently the audacity to reopen the case and request Argentina to pay up,”he said. “Who do they think they are – these entities of Washington’s legal (sic) system? Interfering in sovereign countries, hoping their one-track decisions supporting US-based financial groups will be honored? The US is threatening Argentina with exclusion from the international credit system. One can just hope that the Argentine Government is not lured into this audacious blackmail. 

US courts and other bullying institutions they simply get away with it, nobody barks, nobody even asks questions, he noted. “

“Look at their US airport security imposing on European countries new ‘security measures’, which are basically an excuse for harassment. The rest of the world is submissive and complacent to the Obama regime.”

This is the main reason, he explained, why Washington gets away with murder and nobody says beep; literally with murdering millions of people around the world in the last 20 years, with wars and civil conflicts for power and resources in Iraq, Afghanistan, Libya, Syria, Somalia, Sudan, Yemen, Pakistan and the list goes on. No court, not even the international court of The Hague makes the slightest attempt to punish Obama, Bush, Clinton and consortia for assassinations around the globe and for continuously committing war crimes. The Anglo-US propaganda machine has blinded the world into believing these wars are necessary for the good and for the protection of humanity. “War is Peace” as the Washington Post recently suggested.

Now, another US court has decided to ‘punish’- or to use the classical newspeak word – to ‘sanction’ the French PNB Paribas with some 9 billion dollars, maybe more, for doing business with Iran against which the US has also levied sanctions. Of course, and finally, this action is backfiring, as Paribas, via the French Central Bank is already arranging dealing directly with China with Euro-Yuan financing of international trade.”

“The French are well-poised to do the same with Russia and other countries, thereby sidestepping the traditional US ‘clearing’ process. The arrogance of US courts and other US institutions has reached the point where they are not even considering what repercussion their actions might have on the US economy and especially the US dollar. Getting away with bullying and boundless arrogance is hopefully soon reaching the end of the line. The signs are visible,” he said.

In the meantime, Koenig added, realizing the backfiring of their bullying tactics, the Obama government has approached Hollande with another attempt of blackmailing, suggesting to reduce the Paribas fine to close to zero, if they would refrain from direct Euro-Yuan trading. One can only imagine that the Obama Administration is estimating the cost and long-term ripple effect of France’s sidestepping the dollar as considerable higher than a one shot fine of 9 or 10 billion dollars.

Russia’s central bank governor, Elvira Nabiullina is going to visit China this week and the goal of the visit is to create the framework required for “switching entire sectors of bilateral trading” to Rubles and Yuan. There has been an obvious urgency in the de-dollarization process since the advent of the crises in Ukraine and in South-China Sea.

Peter Koenig therefore believes, that the de-dollarization efforts of Russia and China are a good start.

“Setting the initial stage is a good beginning and will certainly enhance credibility in an alternative monetary system around the world,” he said. “However, this move is not meant to be an isolated step. International trading in local currencies, no longer using the dollar denomination for determining contract values, has been practiced among the BRICS, including some others, like Argentina, already for a few years. However, under those arrangements dollars could still be used for payment.”

Under the scenario initiated by Russia and China, he said, the dollar would no longer have a role. Payments and international transfers would not pass through the US dominated clearing systems – NY-based Wall Street banks and the BIS (Bank for International Settlements), but would require currency swaps among the two central banks of the trading partners, so as to build up reserves in their respective currencies.

“In fact the concept of diversification from the dollar as a reserve currency has already caught on with otherwise fully aligned countries, such as Australia. The Australian Central Bank recently declared that in the future it will hold at least 5% of its reserves in Chinese Yuan. This may rapidly increase as the China-Russia Asia market orientation solidifies and grows. After all, Australia is a close neighbor and partner in the growing Asian realm.”

The vision is to gradually create an all new monetary system, where other countries would join in creating a basket of currencies based on the value of their economies. Ideally this would be initiated by the BRICS and some of their allies, accounting together for about one third of the world economic output and half of the globe’s population.

“In today’s world, stopping wars and conflicts and US ‘sanctions’, political bullying and blackmail is urgent,” he said. “De-dollarization, the reduction on the demand for dollars, may accelerate the process. But harmonizing economic and monetary policies within unequal partners like the BRICS may be a slow process. In Europe it has taken more than ten years until the euro emerged, and it still resulted in an unequal and unbalanced partnership. This must be avoided. Therefore, a longer process may be justified. In the meantime, the world cannot wait stopping the economically and physically destructive bulldozer, the Washington directed NATO killing machine.”

The first step, a Russian-Chinese framework to switching entire sectors to bilateral trading in Rubles and Yuans, away from the dollar, will already drastically reduce demand for the dollar, said Koenig. It may also pave the way for an even more solid solution, a new combined Ruble-Yuan currency. Once established, it may be sufficient to attract more following in the use for trading and foreign exchange reserves, especially realizing how fast eastern economies grow, while the west is struggling avoiding faltering altogether. There is light at the end of the tunnel. Ukraine may be just the square on the chess board, where the arrogant eagle will be out-maneuvered by the dragon-bear wisdom.

 © Collage: “Voice of Russia”