So there you have it.
You may recall that Russia has been cut off from the SWIFT system. Now if you’re a consumer of Western legacy media, you’d likely not have heard a word on it, but the fact is that Russia was largely prepared for this and has already developed and is now using the SPFS the Russian equivalent of SWIFT, developed by the Central Bank of Russia since 2014.
If you weren’t paying attention at the time, we were, and I can tell you that after the The West threatened to disconnect Russia from the SWIFT system was when they urgently began building SPFS. This is an alternative for international payments which, in their own words, will… “cut reliance on the Western financial system.”
In the meantime, Russia is taking steps to strengthen the alliance between BRIC nations, including re-routing trade to China and India.
That this is hardly reported in the Western MSM is both hilarious and rather frightening. Perhaps the sheeple don’t deserve to know they’re on the Titanic and the only life boats are already spoken for by the 1%.
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In any event, underpinning this trade with the USD is problematic not only for Russia, but any country which may now (or in the future) disagree with the US. This lesson was taught earlier this year, after Russia found $300b of its USD currency reserves to have been stolen. As such, any alternative currency must be removed from any Western influence in the trade.
The USD is backed by “the full faith and credit” of the US government, which is to say… debt. This debt-based system is problematic for the US, which a lot of people focus on. That is true, however in the short term it is a bigger problem for those in the system that are not the US.
Because the US has seigniorage, while others don’t. That means the eradication of the USD system for many actually involves paying off the debts. That is bullish for the USD, and that very bullishness itself creates a feedback loop which causes more bankruptcies (particularly in Emerging Markets). But this also creates a situation where, when seeing the inevitability of outcome, many countries will find the relative benefits of a BRICs currency system, especially when not penalized for defaults on the old (Western US led) system.
We’re in the early stages of this, though it is moving very quickly now. What is worth considering is that this new BRICs based currency system hasn’t got the debt based system in place, where participants are tied to it like serfs. They need something new and it needs to be non coercive. A carrot, not a stick.
And this is where the following is so important to understand.
This new currency system will be backed by “stuff”.
After all, it is what the BRICs are known for.
This is from a Russian news site.
Here we are.
The foundation of a new currency system is being built together with trade being conducted outside of Western financial institutions and centers.
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Chris MacIntosh, after working for many top-tier investment banks, left the corporate world. He has since built and sold multiple million-dollar businesses, built a VC firm allocating $35m into early-stage ventures, and become a full-time trader. This article was originally published on Doug Casey’s International Man.