by Pepe Escobar, Lew Rockwell:
The oligarchy that really controls the Empire of Chaos has hit the panic button, as the structural contours of Hegemony seriously wobble.
The petrodollar is one of the key features of this Hegemony: a recycling machine channeling non-stop buying of US Treasuries then spent on Forever Wars. Any player even thinking of diversifying from this infernal machine is met with asset freezes, sanctions – or worse.
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At the same time, the Empire of Chaos cannot demonstrate raw power by bleeding itself dry in the black soil of Novorossiya. Dominance requires ever-expanding – plundered – resources, side by side with that non-stop printing of US dollars as a reserve currency to pay for astronomic bills. Additionally, borrowing from the world works as imperial financial containment of rivals.
But now a choice becomes imperative – an inescapable structural constraint. Either keep astronomical spending on military dominance (enter Trump’s proposed $1.5 trillion budget for the Department of War.) Or keep ruling the international financial system.
The Empire of Chaos cannot do both.
Against the weaponization of the US Treasury bond system – de facto monetary imperialism – BRICS incarnate the strategic choice of the Global South, coordinating a drive towards alternative payment systems.
The straw that broke the steppe camel’s back was the freezing – actually stealing – of Russian assets after the expulsion of a nuclear/hypersonic power, Russia, from SWIFT. Now it’s clear that Central Banks everywhere are going for gold, bilateral deals and considering alternative payment systems.
As the first serious structural shock to the system since the end of WWII, BRICS is not overtly trying to overturn the system – but to build a viable alternative, complete with large-scale infrastructure financing bypassing the US dollar.
Venezuela now illustrates a critical case: Can a major oil producer survive outside of the US dollar system – without being destroyed?
The Empire of Chaos has ruled, “No”. The Global South must prove it wrong. Venezuela was not that critical on the geopolitical chessboard as it represented just 4% of China’s oil imports. Iran in fact is the crucial case, as 95% of its oil is sold to China and settled in yuan, not US dollars.
Iran though is not Venezuela. The latest coordinated intel op/terror attacks/regime change attempt on Iran – complete with a pathetic mini-Shah refugee in Maryland – miserably failed. The threat of war, though, remains.
BRICS Pay, The Unit, or CIPS?
The US dollar now represents less than 40% of global currency reserves – the lowest in at least 20 years. Gold now accounts for more global foreign exchange reserves than the euro, the yen and the pound combined. Central Banks are stockpiling gold like crazy, while BRICS accelerates the test of alternative payment systems in what I previously defined as “the BRICS lab”.
One of the scenarios being directly proposed to BRICS, and designed as an alternative to cumbersome SWIFT, which does at least $1 trillion in transactions a day, features the introduction of a non-sovereign, blockchain-based trade token.
That’s The Unit.
The Unit, correctly described as “apolitical money”, is not a currency, but a unit of account used for settlement in trade and finance between participating countries. The token could be pegged to a commodity basket or a neutral index to prevent domination by any single country. In this case it would work like the IMF’s Special Drawing Rights (SDRs), but within a BRICS framework.
