US Warns Allies Not to Join China-led Development Bank

[Ares]

How do you know a dollar collapse is coming? Because the rest of the world is preparing for it.

Western allies are flocking to join the new China-led Asian Infrastructure Investment Bank (AIIB), while the United States and World Bank sit on the sidelines and lecture them about "appropriate" financial governance.

Reuters reports:

The United States has urged countries to think twice before signing up to a new China-led Asian development bank that Washington sees as a rival to the World Bank, after Germany, France and Italy followed Britain in saying they would join.

The concerted move by U.S. allies to participate in Beijing's flagship economic outreach project is a diplomatic blow to the United States and its efforts to counter the fast-growing economic and diplomatic influence of China.

Europe's participation reflects the eagerness to partner with China's economy, the world's second largest, and comes amid prickly trade negotiations between Brussels and Washington.

"I hope before the final commitments are made anyone who lends their name to this organization will make sure that the governance is appropriate," Treasury Secretary Jack Lew told U.S. lawmakers.



It seems many countries are growing tired of the U.S.'s arbitrary economic sanctions, playing politics with the SWIFT system, dollar manipulation of commodities, strangling IMF and World Bank debt with unequal representation in those institutions. Not to mention the ruthless violence used to protect this racket.

China is tired of waiting to be granted more power in international banks so they're creating their own opportunities around the world. They're involved in creating the BRICS development bank, an alternative to SWIFT, building a canal in Nicaragua to rival the Panama Canal, and now this new Asian Infrastructure Investment Bank (AIIB). In other words, it's on.

"If you try to fight the rising power's peaceful ascent you sow big problems in the future," Fred Bergsten, a former official at the U.S. Treasury and currently a fellow at the Peterson Institute in Washington told Reuters.

Over the last few years US-imposed sanctions have had less and less effect as nations find ways around them. These new systems will make sanctions essentially worthless, and the biggest losers of sanctions may end up being US companies who're prohibited from trading in certain parts of the world.

Despite the corporate media's best efforts to drum up conflict with Russia, sanctions haven't worked, leading some Western hawks to promote cutting off Russian banks from SWIFT. This was met by Russia threatening retaliation which resulted in Russia being awarded a seat on SWIFT's board for the first time.

Can you smell the desperation? American dominance in the world economy is clearly waning. The US dollar is also slowly being diluted as the world reserve currency and all the key players know it. In fact, it's now happening by design.

The dollar is currently enjoying record spending strength in the global economy for no fundamental reason except that oil is measured in dollars. The oil price crash feels like a last-ditch effort to boost demand for dollars. Yet national debt levels, endless wars, and the fake paper economy ensures that this facade will eventually collapse, probably as fast as it was created.

This new alternative system may limit the contagion of a dollar collapse. It's basically a good thing that the world will have more choice in how it moves money. But, be warned, it is no different than the current fractional-reserve debt-based parasite that currently leeches off most of the planet, save for slightly different board members.

Nevertheless, I bet the establishment will hail them as saviors when the US economy can no longer bail itself out. Tick tock.


http://www.activistpost.com/2015/03/us-warns-allies-not-to-join-china-led.html

[SWRichmond]

"How do you know a dollar collapse is coming? Because the rest of the world is preparing for it."

Yes, and the signs of this have been visible for years, and have been noticeably accelerating in recent years. It's very very obvious; the USD is going to lose its reserve status.

China currency swaps, Renminbi trading centers, BRICS bank, Russo-China energy deals, new electronic clearing system, all of which bypass USD-centric systems. It's a fricking tidal wave.

[Horn]

A barrel of oil in participating countries will rise to an equivalent $200, while in it remains $60 in loyal nations.

[singular_me]

too bad.... all gimmick , IMHO


‘Colossal Defeat’ For Obama As Australia Joins China’s Regional Bank
http://www.zerohedge.com/news/2015-03-16/colossal-defeat-obama-australia-joins-chinas-regional-bank

[7th trump]

I gotta ask.
Who said there has to be only 1 reserve currency?

Just because other countries are opening accounts with AIIB does that mean the dollar is to collaspe?
Or is this just good bussiness?
One keeping the other honest by competition.

Sure the reserve banks will lose ther monopoly, but does it really mean the reserve system is out of bussiness.

To me this means the reseve banks will have to learn to compete....you know capitalism.

[Ares]

I gotta ask.
Who said there has to be only 1 reserve currency?

Just because other countries are opening accounts with AIIB does that mean the dollar is to collaspe?
Or is this just good bussiness?
One keeping the other honest by competition.

Sure the reserve banks will lose ther monopoly, but does it really mean the reserve system is out of bussiness.

To me this means the reseve banks will have to learn to compete....you know capitalism.

Right, I agree. The dollar doesn't necessarily have to collapse. But it will have to compete which it hasn't had to do since the days before Bretton Woods. The near monopoly on having the only global reserve currency are coming to an end. If Saudi Arabia / OPEC decide to start pricing oil in say Rubles, Yuan, and Dollars it will make for some interesting speculation on where the price of oil could go and which would be the preferred currency of the world to purchase their oil.

If that happens the dollar will suffer a sharp decline in value.

[singular_me]

1 dollar bill today is a mere 1 cent, perhaps 2, worth...how low can it go ???


after Germany, France and Italy followed Britain in saying they would join.... lets write it simpler: saying rothchild would join.

[Ares]

1 dollar bill today is a mere 1 cent, perhaps 2, worth...how low can it go ???


after Germany, France and Italy followed Britain in saying they would join.... lets write it simpler: saying rothchild would join.

When comparing it to other floating currencies it could go down to fractions of a penny.

We'll never know the true value while they continue to manipulate the price of gold.

[Twisted Titan]

Despite the corporate media's best efforts to drum up conflict with Russia, sanctions haven't worked, leading some Western hawks to promote cutting off Russian banks from SWIFT. This was met by Russia threatening retaliation which resulted in Russia being awarded a seat on SWIFT's board for the first time.



Does anybody more info on this?

This would be one of the biggest mea culpas to date.

[steyr_m]

Despite the corporate media's best efforts to drum up conflict with Russia, sanctions haven't worked, leading some Western hawks to promote cutting off Russian banks from SWIFT. This was met by Russia threatening retaliation which resulted in Russia being awarded a seat on SWIFT's board for the first time.



Does anybody more info on this?

This would be one of the biggest mea culpas to date.

I've read it elsewhere on Canadian news media, I'll try to look.

[Ares]

Despite the corporate media's best efforts to drum up conflict with Russia, sanctions haven't worked, leading some Western hawks to promote cutting off Russian banks from SWIFT. This was met by Russia threatening retaliation which resulted in Russia being awarded a seat on SWIFT's board for the first time.



Does anybody more info on this?

This would be one of the biggest mea culpas to date.

Yep, here ya go

http://investmentwatchblog.com/swift-gives-obama-the-bird-and-russia-a-seat-on-the-board/

[Cebu_4_2]

Yep, here ya go

http://investmentwatchblog.com/swift-gives-obama-the-bird-and-russia-a-seat-on-the-board/

Save your trinkets.

[Twisted Titan]

Wow. that is like in the days of old when a king was warring with another Kingdomin the middle of the battle he would offer his daughter in marriagein the hopes that that will satisfythe aggressor.

[mick silver]

Real Reason for the Asian Investment Bank – and Western Participation
March 18, 2015



http://www.thedailybell.com/default/includes/themes/tdb/images/printer.png (http://www.thedailybell.com/printview/params/id/36166/printview/)
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Defying U.S., European allies say they'll join China-led bank ... Germany, France and Italy said on Tuesday they would join a new China-led Asian investment bank after close ally Britain defied U.S. pressure to become a founder member of a venture seen in Washington as a rival to the World Bank. – Reuters
Dominant Social Theme: Asia will show the West how to run an investment bank.
Free-Market Analysis: High finance and international politics are subtle affairs. On its surface, the effort to create an Asian-oriented "world bank" is straightforward. But beneath the surface, currents swirl.
The putative reason for such a bank is that the current World Bank is often exploitative and takes advantage of countries in trouble. A second reason is that the advantages of a World Bank will now accrue to Asian members. Their influence and monetary power will expand accordingly.
But the third reason is the most interesting of all. A little more from the article, first:
The concerted move to participate in Beijing's flagship economic outreach project was a diplomatic blow to the United States, reflecting European eagerness to partner with China's fast-growing economy, the world's second largest.
It comes amid prickly trade negotiations between Brussels and Washington, and at a time when EU and Asian governments are frustrated that the U.S. Congress has held up a reform of voting rights in the International Monetary Fund (http://www.thedailybell.com/definitions/params/id/1823/) due to give China and other emerging powers more say in global economic governance.
German Finance Minister Wolfgang Schaeuble made the announcement at a joint news conference with visiting Chinese Vice Premier Ma Kai, at which no questions were allowed. He said Germany, Europe's biggest economy and a major trade partner of Beijing, would be a founding member of the Asian Infrastructure Investment Bank.
The lure of lending to countries that need money is considerable. Control a monetary war chest to influence the world or at least a region that can gain from such resources.
In the US, the World Bank is accompanied by the International Monetary Fund. They operate as a kind of tag team, as we have often observed. The World Bank lends money with some assurance it will be squandered. The IMF comes in later to provide the "austerity" necessary to assure repayment and often garners privatized assets from the prostrate country for its members.
We spoke to John Perkins (http://www.thedailybell.com/definitions/params/id/2159/) on this mechanism some years ago in an interview entitled, " Confessions of an Economic Hit Man and the Unsustainability of Modern Capitalism (http://www.thedailybell.com/exclusive-interviews/1791/Anthony-Wile-John-Perkins-on-His-Best-Selling-Book-39Confessions-of-an-Economic-Hit-Man39-and-the-Unsustainability-of-Modern-Capitalism)." Of course, Perkins's book, Confessions of an Economic Hit Man, details his experiences in advising The World Bank, IMF and other Western facilities on their activities.
Perkins went on to write several scathing exposes about how these bodies operate.
Here is some of what Perkins told us:
The World Bank is a tool of economic hit men, there is no question about it. It's the tool of big corporations, the IMF and most of what we call intelligence agencies of the United States, CIA (http://www.thedailybell.com/definitions/params/id/2401/) and NSA. Essentially the job of all these organizations is to help what used to be just US businesses – now we call them multi-nationals – get themselves established around the world in positions where they can exploit the world's resources, natural resources and human resources.
... One of my jobs as an economic hit man was to identify countries that had resources like oil and arrange huge loans for those countries from the World Bank and sister organizations. But the money would never go to the actual country; instead it would go to our own corporations to build infrastructure projects in that country like power plants and industrial parks; things that would benefit a few very wealthy families.
So then the people of the country would be left holding this huge debt that they couldn't repay. We would come back and say, "well, since you can't repay your debt, you have to restructure your loan."
That's when the IMF comes in. So the World Bank makes the original loan and IMF shows up and says, "We'll help you restructure your loan, but in order to do that you have to meet certain conditionalities. You have to sell your oil or whatever the coveted resource is at a cheap price, to the oil companies without restrictions." Or they would suggest the country sell electric utilities, water and sewage, maybe even your schools and jails to private multi-national corporations. Or maybe allow military bases to be built; these sorts of things.
This is the model that China – and Asia – presumably want to overtake. The idea is that a bank led by China will be less obviously exploitative and will actually lend money that will find its way to projects rather than to Swiss bank accounts.
Obviously, there is an awareness of the deficiencies of the World Bank. A joint statement assured the world that new bank operations would "follow ... the best standards and practices in terms of governance, safeguards, debt and procurement policies."
Of course, being cynical about such things, we don't think for a minute that this new bank will operate much differently than the World Bank. Maybe for a while it will be "kinder and gentler," but why should one believe that the Chinese ultimately will operate their bank more altruistically than the West?
The real reason for an Asian world bank seems to us to have to do more with building a bipolar world that will eventually provide leverage for a truly international financial system.
Right now the creation of this new bank is being positioned as stemming from disenchantment with Washington. But over time it will be seen that China – Asia and perhaps Russia, too – are creating an entirely separate financial infrastructure.
Yet it is not one – despite current reports – intent on shutting out Western interests. The West, for instance, is now a big part of the initial creation of the Asian bank. In fact, the City of London (http://www.thedailybell.com/definitions/params/id/1814/) itself, perhaps the most powerful Western financial player, is also significantly involved.
If the plan is to build and then merge a bipolar system, it certainly makes sense that the West would have significant interests in the new facility as well as the old one. The merger is presumably a ways off, but preparations are being made ...
We began by pointing out that international finance and power politics practiced in the 21st century can be subtle, indeed. The outward guise of a new financial system is being written about, but the underlying realities are not yet being covered.
Conclusion: Eventually, that may change.

- See more at: http://www.thedailybell.com/news-analysis/36166/Real-Reason-for-the-Asian-Investment-Bank--and-Western-Participation/#sthash.qYks4i9s.dpuf