Russian finance minister says the BRICS nations should create their own SWIFT system to counter sanctions and strengthen their own national currency.
Must Watch: Putin offers Nuclear Weapons to Everyone
The dollar reserve system is under attack in a way it has never been before.
Anatoly Siluanov, Russia’s finance minister, said on Saturday that the five BRICS countries – Brazil, Russia, India, China, and South Africa – might reduce the impact of Western sanctions on their economies by pooling their resources and employing a variety of financial tools.
The Russian Finance Ministry quoted Siluanov as saying, “The current crisis is man-made, and BRICS countries have all the instruments necessary to mitigate its consequences on national and global economies.”
Economic sanctions against Russia were blamed by the minister for “destroying the foundation of the existing international monetary and financial system based on the US dollar,” and he urged the BRICS to use their national currencies more in foreign trade, integrate payment systems, and develop an alternative to the SWIFT payment messaging platform.
MUST WATCH: The Truth About COVID-19 Revealed In EU Parliament
Subscribe to GreatGameIndia
According to a statement from his ministry, Siluanov told a ministerial meeting with BRICS on Friday that the global economic situation had deteriorated significantly as a result of the sanctions.
“This pushes us to the need to speed up work in the following areas: the use of national currencies for export-import operations, the integration of payment systems and cards, our own financial messaging system and the creation of an independent BRICS rating agency,” Siluanov said.
According to The Statesman, the BRICS countries’ central banks have already agreed to perform the fifth test of a financial mechanism that will allow them to pool “alternative currency” reserves to protect their economy from external shocks.
Dmitry Medvedev’s statements on Telegram were mirrored by Siluanov.
The Russian Security Council’s Deputy Head warned of the geopolitical ramifications of Western sanctions and the weaponization of the US dollar reserve system:
“Their result will be a destroyed international order and extremely difficult consequences for the world economy and the life of individual countries,” adding that:
“It will be clear to everyone that the supposed effectiveness of sanctions is an absolute lie.”
Even more ominously, Medvedev considers anti-Russian sanctions to be an act of aggression:
“The whole combination of the legal and political circumstances prompts the conclusion that sanctions in the current situation can be qualified as an act of aggression against Russia and a form of hybrid war,” Medvedev wrote, adding:
“In the first place, when they are aimed at undermining economic independence, and, consequently, state sovereignty, which endangers the very existence of the state. As a matter of fact, as our opponents say, it is a declaration of economic war.”
If all of this sounds like the rantings of a prejudiced politician controlled by Russia’s propaganda arm, it is… but many people believe that the ‘weaponization’ of the dollar (payment system) will have major unforeseen repercussions.
For example, the International Monetary Fund’s (IMF) First Deputy Managing Director Gita Gopinath warned The Financial Times that recent financial sanctions imposed on Russia for its invasion of Ukraine threaten to erode the petrodollar’s dominance as the international currency.
Since the United States imposed sanctions in reaction for Russia’s annexation of Crimea in 2014, Russia has been aiming to minimise its reliance on the petrodollar for years.
The present Ukrainian crisis has merely hastened their preparations… and it now appears that the entire BRICS group is on the verge of crossing the divide as Bretton Woods III takes shape.
The ramifications are enormous (and, worse, while ZoltanPoszar does not officially express it, he definitely believes that world war is on the way):
Empires fall and rise. Currencies fall and rise. Wars have winners and losers.
When Wellington beat Napoleon, the trade was to buy gilts. I am no expert on geopolitics, but I am an interest rate strategist and I think the level of inflation and interest rates and the size of the Fed’s balance sheet will depend on the steady state that emerges after this conflict is over. Three is a magic number:
The four prices of money are managed via Basel III and central banks as DoLR.
The four pillars of commodity trading are shaped by war, hopefully not WWIII.
The new world order will bring a new monetary system – Bretton Woods III.
A payment system based on the BRICS would be the final challenge to the current dollar-hegemon-based system. Even if this is only talk, it highlights the reality that the dollar is in trouble. Future dollar weaponization should be carefully considered by US policymakers.
Very good idea indeed.
The biggest sign of positive future changes is the fact that Western nations keep shooting themselves in the foot .Stay tuned ,as it is quite possible that the old will have to be destroyed as the new becomes prominent .