Western Financial And Trade Hegemony Disappearing
Above Photo: Maxim Shemetov/Reuters, Sergei Karpukhin
Only an apocalyptic war can hinder the march of a multilateral world
On the eve of the BRICS Summit in China’s Xiamen in the Fujian Province, a defiant Putin hit back on the Western elite vowing to destroy the US-led Western global financial and trade hegemony.
Putin says it plain and clear in an article he penned ahead of the of summit that starts September 4th.
It is fitting that the master judoka Putin announced his Sun-Tzunian strategy in connection with the Chinese summit. A multitude of Sun Tzu quotes lend themselves to a description of Putin’s approach, but in this connection, we have this one in mind:
“What is of supreme importance in war is to attack the enemy’s strategy.”
That’s precisely what Putin is about to do, by addressing the US strategy of absolute dominance of the global economy and by aiming to take down the prevailing unfair global financial and economic architecture.
And, there is no shortage of able allies, now with the rise of the economies of the free world: BRICS and the other emerging countries. Of course, all those backed up with the military might of China and Russia.
It’s not a question of expansionist militaries, rather forces that now are able to stand up and say: Enough is enough. Like the militaries, now backing up the legal power of the vetoes China and Russia posses in the UN Security Council.
Putin’s new finance and trade architecture
Putin’s strategy aims first at consolidating the political unity of the new emerging world powers and with that to attack the existing institutions of the failing West, in particular their currency hegemonies and their financial power structures, the IMF and the World Bank.
(Russia aims at promoting global) “financial regulation reforms” and at overcoming “the excessive domination of the limited number of reserve currencies” (that is, the currency monopolies of Western countries) coupled with working “towards a more balanced distribution of quotas and voting shares within the IMF and the World Bank.”
Putin wants to break the Western hegemonic dominance of world trade by building a genuine global free trade system as opposed to the present sham-liberal system marked by a de-facto US protectionism of its own narrow interests. He continues:
Russia advocates “the foundations of an open, equal and mutually beneficial multilateral trade system and the strengthening of the role of the WTO.”
It is especially noteworthy and welcome that Putin has in his analysis arrived to identifying the monopolistic dominance of world trade by the Western transnational corporations as a major structural problem. Putin wants to unleash the collective power of the antimonopoly agencies of the BRICS countries against those predatory corporations:
“The goal is to create a package of cooperation measures to work against the restrictive business practices of large multinational corporations and trans-border violations of competition rules,”
We said so
I am personally very pleased to note that Putin has so lucidly identified the present hegemonic barriers in world finances and trade and that he has so succinctly defined the strategy to combat the existing unfair system.
In a recent report by our firm on how Russia has coped with the sanctions and the dramatic plunge of the oil price, we wrote in the same line, but rather less diplomatically than the way Putin formulated it, to quote:
“We want to stress that there are sanctions of two types, officially enacted sanctions and unofficial sanctions. The latter have not been officially announced by any Western government but are deliberately pursued under the agenda of economic containment, itself part of the grand geopolitical strategy of Russia containment.
By these measures Russian investors and exporters are actively by way of unannounced (i.e. illegal) rules hindered from entering Western markets and other global markets were those powers hold sway, and conversely Western (and other) investors are being discouraged (coerced) from certain investments into Russia.
The economic containment takes many other forms, too, for example, it affects Russia’s participation in global financial operations and the rubles role among global currencies.
We assess that the unofficial sanctions are even more cumbersome and harmful than the official one.”
“As a matter of fact, there are some very real and concrete constraints, which have prevented, and will continue to prevent Russia from increasing its exports of manufactured goods as long as these real constraints are not identified.
The reasons are both of historical nature and related to the present realities of global trade, the already high level of saturation and entrenched positions of globally dominating, mostly Western based, transnational corporations, and the whole world trade order based on institutionalized hegemony of the Western countries, as well as, their seemingly unlimited access to virtually interest-free financing.
Russia can begin to tackle these problems only through similar geopolitical maneuvers (fortunately, initial progress has been made in this regards) and a very well thought out strategic marketing plan on the level of both the national economy and corporations.”
Here is a link to the full report titled What Does Not Kill You Will Make You Stronger – The Russian Economy 2014 – 2016, the Years of Sanctions Warfare.
Only an apocalyptic war can hinder the march of a multilateral world
In fact, what Putin is saying is already happening, what he wants to do is to reinforce and speed up the process. A seemingly unstoppable process of redistribution of relative global wealth is going on in favor of the emerging countries to the detriment of the West.
As we will see from the data below, the West has been fast losing its overwhelming economic hegemony, and the process is only accelerating. No wonder, the Western leaders – and especially the global elite, the de facto rulers, who have staked on the New American Century aka the New World Order – are desperate and in evident panic.
They have correctly come to the conclusion that their project of absolute global dominance has hit a wall – if things are to continue in this trajectory under conditions of relative peace. Peace has put a snag in their schemes. That’s why they need war – and chaos.
That’s why they have in their desperation simultaneously taken on half the world on multiple fronts. It’s containment of China, harassment of it in the South China Sea and talk of a trade war; containment of Russia, sanctions war and encirclement of the country with NATO forces and neo-fascist US puppet regimes; renewed aggression against Iran; regime change operations in Turkey; attack on Venezuela; the now failing Syrian invasion by means of mercenary terrorist armies; converting the entire Western mainstream media into a giant Goebbelsian propaganda machine for the purpose of demonizing their targets and brainwashing the Western populations to support every war they declare (or wage without declaring); etc. etc.
Indeed, there is a regime change operation going on in Rome itself, the campaign to neutralize President Trump and eventually to remove him from office. – But that has not been working. And, the NWO-globalists are getting more and more desperate by the day. That’s why some of them might press the button any day now.
Redistribution of global wealth
The shocking truth about how fast the West has lost its economic power can be gleaned from below graphs.
In a report of 2014, we compared the G7 countries with a group we arbitrary called Emerging 7, consisting of the then seven biggest non-G7 countries: China, India, Russia, Brazil, Indonesia, Mexico, South Korea (on 2017 data, Turkey would be bigger than South Korea). We do not strive to imply that the E7 would form a political or economic block, rather we have grouped them together only to illustrate the fall of the economic might of the G7. (However, through BRICS, G20 and other forms of cooperation most of the emerging economic powers are in some kind of cooperation, which is not to the liking of the Ancien Régime).
The G7 is an old aunties tea society, which still wants in a self-delusional manner to be known as the “world’s seven most industrialized and advanced economies,” although they clearly are not.
In 1990, they still were. That’s only less than 30 years ago. Back then, their combined economies were worth $14.4 trillion, being more than 6 times bigger than the E7, and amounting to a staggering 39% of the combined world GDP.
In a stunning change of fortunes, already by 2013, the E7 had surpassed the G7. Just a few years later, by 2017 (IMF estimates), the E7 has with $47.5 trillion pulled way ahead of the failing G7, which was left with $37.8 trillion, or 30% of the world total. (The trend is even more catastrophic for America’s vassals as the share of the US of the G7 GDP is now 50% versus 41% in 1990).
Russia gets a boost from the world’s fastest growing neighbors
Although the West is doing its best to harass Russia and turning its European neighbors into a launch platform for a hoped-for invasion, Russia is endowed with friendly and increasingly prosperous neighbors at all the other borders. The world’s fastest growing economies are there for Russia to tap into.
China has been the world’s fastest growing economy for decades, and although the growth percentage figure has gone down lately, in absolute terms the growth is huge. China’s growth at 6.5% per annum, equals about $1.5 trillion in absolute terms, meaning that every two years it delivers economic growth that equals the size of Britain’s total historically achieved GDP ($3 trillion).
In 2016, the world leader in economic growth was – another of Russia’s neighbors – surprisingly enough Iran, with a staggering 15.7% growth in the fourth quarter of 2017 (www.tradingeconomics). Turkey, with whom Russia is in a process of rapprochement, grew 5% (Q1/2017). Russia will also be able to tap into the fast growth of India (6.1% Q1/2017) and Iraq 11% (Q4 2016) in the neighborhood.
Albeit still small in absolute terms, Russia’s Central Asian neighbors (of the Eurasian Economic Union and CIS) have shown consistent strong growths, Uzbekistan (7.8% Q1/2017), Tajikistan (6.5% Q1/2017), Kyrgyzstan (6.4% Q2/2017) and Turkmenistan (6.2% Q1/2017). The biggest of those economies, Kazakhstan picked up 4.2% in Q2/2017 and even Armenia showed strong growth with 6.5% (Q1/2017).
At the same time, there is no real growth in the West, and there has been none in the last decade or so.
Even with endless issuance of new money in operations that the Western elite euphemistically call quantitative easing, they cannot muster more than 1% or 1.5% percent nominal growth at best. The money they are printing serves only to barely keep the economies floating while they are perpetuating the rigged system and lining the pockets of the elite one-percent.
So, if the West does not want to play with Russia, there are a lot of willing, able and growing countries that will.