Putin Drafts Bill Dumping US Dollar Within CIS Countries

In another attempt to shut down the financial war chest of the Nazionist Kazharian Mafia, Putin himself is drafting a bill that would eliminate the use of the fiat dollar within Russia’s sphere of influence. This measure is complementary to the ongoing not so covert currency attack by China against the fiat financial system of the West.

Both Russia and China are also helping the two Koreas settle their differences peacefully using concrete economic collaboration. This is a far cry to the EUs ongoing looting of Greek sovereign assets and the US war hawks perennial instigation of domestic turmoil in Ukraine.
The plot to systematically dump the US dollar has never been more overt than this one…

Putin Says Dump Dollar

Russian President Vladimir Putin © Alexei Druzhinin
Russian President Vladimir Putin has drafted a bill that aims to eliminate the US dollar and the euro from trade between CIS countries.
This means the creation of a single financial market between Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and other countries of the former Soviet Union.
“This would help expand the use of national currencies in foreign trade payments and financial services and thus create preconditions for greater liquidity of domestic currency markets”, said a statement from Kremlin.
The bill would also help to facilitate trade in the region and help to achieve macro-economic stability.

Within the framework of the Eurasian Economic Union (EEU) the countries have also discussed the possibility of switching to national currencies. According to the agreement between Russia, Belarus, Armenia and Kazakhstan, an obligatory transition to settlements in the national currencies (Russian ruble, Belarusian ruble, dram and tenge respectively) must occur in 2025-2030.
Today, some 50 percent of turnover in the EEU is in dollars and euro, which increases the dependence of the union on countries issuing those currencies.
Outside the CIS and EEU, Russia and China have been trying to curtail the dollar’s dominance as well.
READ MORE: China approves usage of ruble instead of US dollar for border city
In August, China’s central bank put the Russian ruble into circulation in Suifenhe City, Heilongjiang Province, launching a pilot two-currency (ruble and yuan) program. The ruble was introduced in place of the US dollar.
READ MORE: Time for Russia & Vietnam to think of switching to local currencies – Medvedev
In 2014, the Russian Central Bank and the People’s Bank of China signed a three-year currency swap agreement, worth 150 billion yuan (around $23.5 billion), thus boosting financial cooperation between the two countries.

Russia Might Help Launch a Korean Trade Corridor Next Week

The first freight train crosses the new railway checkpoint between the Russian station Makhalino and Chinese station Hunchun, Jilin province
North and South Korea just barely walked back from the brink of war this week, with both deciding instead to enact concessions to the other and set dates for future talks. Although they have drastically different ideologies and perspectives on international relations, the one thing they do agree upon is the eventual reunification of the Korean Peninsula.
Realistically speaking, it’s probably a far-off goal, but baby steps in that direction can be seen by bilateral cooperation between the two in shared economic projects, such as the Kaesong industrial park. Joint projects between the Koreas is a trust-building and mutually beneficial mechanism that creates a platform for further cooperation, and it’s in the world’s interest to see the two neighbors get along well with one another.
This is the contextual backdrop in which Russia invited North Korea to attend the East Russia Economic Forum in Vladivostok alongside the other Northeast Asian states, and with South Korea announcing its interest in a trilateral railway project and more goodwill projects with North Korea, it’s very possible that a major deal might be made next week.
The Korean Corridor
South Korean President Park Geun-hye has spoken enthusiastically about a project that she terms the “Eurasia Initiative”, which is her country’s vision to establish an energy and logistics corridor through the North that would connect to China and Russia, with the trade component carrying over to the Trans-Siberian Railroad en route to Europe. Most of the rail infrastructure is already in place for this, and all that needs to happen is for North Korea to modernize its existing routes and to officially standardize the procedures for trilateral trade between it, South Korea, and China or Russia. Since the article is focusing on Moscow’s ties to the peninsula, let’s look at the prospects and benefits of this plan along that geopolitical trajectory.
President Park has pressed the need for both Koreas to restore the Gyongwon Line between Seoul and Wonsan, a coastal North Korean city located in the central part of the country. From the opposite direction, Russia re-established the Khasan-Rason railroad in September 2013 to facilitate coal exports to its neighbor. Rason is connected to Wonsan through an already existing railroad, albeit one that’s in need of maintenance and possible modernization investments.
Should this stretch be upgraded (perhaps with the expertise of the Russian Railways company) and a trilateral agreement be reached, then South Korea’s Eurasian Initiative would link up with Russia’s Eurasian Land Bridge and inaugurate the Korean Corridor, which aside from bringing prosperity to the Russian Far East, could also bring development to the North Korean countryside. It could very well be that North Korea’s government decides against allowing South Korean-Russian-European goods to offload along the railroad’s various stops within its territory, but even still, it could procure a handsome transit fee (paid for in foreign currency, which the country needs) for allowing the said goods’ transit.
Trans-Border Special Economic Zone
The Korean Corridor has more benefits that one might think at first glance. Besides expediting South Korean-European trade and decreasing shipment costs, it would also run through two special economic zones, one in each of the Russian and North Korean transit states. Incidentally, these both happen to be adjacent to one another, forming a sort of trans-border special economic area between Vladivostok and Rason. The profit potential that this engenders is particularly interesting when one considers the role that each of these two ports has in the regional economic dynamic.
Vladivostok is Russia’s most important location for developing the Far East, and the pro-business policies enacted by President Putin’s free port decree for the city and its environs means that it’ll become a central point for foreign investors trying to break into the resource-rich market there. It can thus be inferred that international capital will be used as a catalyst for creating additional logistic networks that branch out from the city and deeper into the Russian East, be it the Far East or Siberia. Once procured, these resources will have to be brought to Vladivostok before they could be shipped elsewhere, and it is precisely at this location that they could also be sent to South Korea via the Korean Corridor trilateral railway. In this manner, the bustling South Korean capital could directly and easily be supplied with Russia’s natural resources, with scant effort on its end besides paying for their purchase.
Rason presents a different opportunity for South Korea and Russia, one which is directed towards China. The port city has lately become China’s preferred hub for its northeast revitalization efforts in the part of the country that some have labeled its ‘rust belt’. Located but a few miles from the Chinese border, it essentially functions as Beijing’s ‘window to the Sea of Japan’, and it makes it a lot more convenient for China to import and export products to and from its deindustrializing northeast. This is very important for South Korea ever since it signed its free trade agreement with China in June, because it would be most efficient for it to trade with that Chinese region directly via the Korean Corridor railroad as opposed to sending its goods aboard a roundabout ship first (as has been the case). Regarding Russia, its international partners that might be weary of investing in North Korea’s Rason as their gateway to northeast China (or prohibited from doing so by North Korea itself) could instead offload or manufacture their goods in Vladivostok en route to that same destination.
The Coal Corridor
The Korean Corridor has the very likely prospect of turning into a Coal Corridor between Russia and South Korea. The US’ Energy Information Agency identifies
South Korea as being the world’s fourth-largest importer of coal (accounting for 28% of its energy needs), while it measures
Russia as has having the world’s second-largest reserves and being the resource’s third-largest exporter. Surprisingly, the same source only counts Russia as exporting 12% of its coal to South Korea, which receives an equal percentage of this as a total of its combined imports. Countries like Australia and Indonesia dominate the South Korean market instead, and this is plainly attributable to the easy maritime access they have in selling their coal there. Likewise, Russia doesn’t enjoy such a geographic trade advantage, as its Siberian coal fields are cut off from the Korean peninsula and thus have to pay the double transport costs of both rail and ship in order to access it, making it not as competitive as it should be.
But, if Russia’s copious coal deposits were directly connected to South Korea via the Trans-Siberian-Korean Corridor rail project, then it would easily capture most of the peninsular state’s market. It could even bring SCO-ally Mongolia into the mix as well, since the country needs to find an alternative buyer for the large amounts of coal that it had previously been selling to China. Beijing has lately been moving away from that energy source in favor of other ones, leaving Ulaanbaatar in danger of macroeconomic destabilization due to its risky dependence on only one primary buyer. Luckily, its pragmatic “Third Neighbor Policy” has borne the fruits of equally friendly relations with both Koreas, which would only be strengthened by providing the two of them with its excess coal, and also boosting Russia’s reputation as the bridge for trans-Eurasian trade. Ultimately, however, it doesn’t matter what form it eventually takes, but if the two Koreas clinch a deal with Russia in Vladivostok, it would show not only that Russia isn’t isolated, but that its Pivot to Asia is also about diplomacy just as much as it is about economics.

‘Victoria Nuland may be passing out virtual cookies outside Kiev’

Demonstrators, who are against a constitutional amendment on decentralization, clash with police outside the parliament building in Kiev, Ukraine, August 31, 2015. © Valentyn Ogirenko
The same forces that are pushing radicals in key hot spots in and around Europe – the US in the first place – also have a part in the protests going on in Kiev. They are not innocent, they just don’t appear in the picture in front of the TV cameras, says political analyst Aleksandar Pavic.
In Kiev, Ukraine’s capital, crowds of protesters came to oppose amendments to the constitution that would provide for decentralization of the country. As a result dozens were injured and one security officer was killed after a grenade was thrown outside the parliament.
READ MORE: Multiple injuries in Kiev as grenade explodes during protest against constitutional law
RT: Do you think we could expect further escalation in Kiev?
Aleksandar Pavic: Ukraine is basically becoming a failed state, it already is. This is a state that has been practically permanently destabilized ever since the Maidan in February 2014. You’ve actually had the radical agenda that’s become institutionalized, meaning that any voices that are calling for any sort of compromise – let’s say with Russia – are being marginalized, being demonized and have just been pushed out of the political spectrum. As a result, radicals are feeding each other and what we have today is practically the revolution coming back to devour some of its children.
The most radical elements were practically the key actors in Maidan and they pretty much set the tone in Ukraine nowadays. So that’s the internal part of the story. But I think externally we also have to think about who gains from this, not just the internal actors. This is a key moment meaning this is something that’s supposed to advance the Minsk agreement agenda. And who would benefit from that being, let’s say, sabotaged? I think maybe it’s the country that’s not part of the Minsk process and I’m clearly talking about the US. And I wouldn’t be surprised. Victoria Nuland isn’t down there passing cookies today, but she may be passing virtual cookies from somewhere else. This is part of a general agenda just keeping Ukraine a kind of unstable place, a failed state on the border of Russia.
RT: How real is the threat posed by far-right groups that have been opposing the government?
AP: It still is because you have the Right Sector, it’s the same actor pretty much who was the key, the most radical actor of Maidan almost a year and a half ago and they’ve become a major factor in Ukraine. They are the ones who are forcing the agenda. Whoever tries to do anything moderate, whoever tries to pursue any sort of compromise, you have the so-called radicals, Right Sector, etc. who are there to halt the process. The same forces that are just pushing radicals in key hot spots in and around Europe – I’m again talking about the US in the first place – they also have a part in this. They are not innocent; they just don’t appear in the picture in front of the TV cameras.
RT: President Poroshenko’s approval ratings are plummeting. What in the eyes of the Ukrainian people is going wrong?
AP: Poroshenko first of all is not being viewed, for one, as a genuine leader. It’s clear that without Western support he wouldn’t even be where he is. The other thing is a total catastrophe that’s taking place in Ukraine today; its economy is practically dead. Corruption is probably greater than it ever was even during the corruption that preceded Maidan. It’s clear that Ukraine has become ruled by oligarchs and of course Maidan was being organized in the name of so-called democracy. What is the average Ukrainian supposed to be satisfied about? There are no good results that have come from this past year and a half regarding the life of the average person: You’ve seen prices go up, social instability, uncertainty as far as employment is concerned. No prospects of recovery anytime soon. Why should they be happy with Poroshenko?
Alexander Mercouris, International Affairs Editor at Russia Insider, suggests that it was predictable that protests would take place in Ukraine as radical groups there are not happy with the peace plan, with the way Kiev is implementing it, with the economic situation and political issues with the government
RT: Are you surprised that the decentralization amendments triggered such a violent response?
Alexander Mercouris: No, I’m not surprised at all. If you have been looking at the situation in Ukraine for some time, there has been increasing protests against the government by various right-wing groups – Right Sector is the most famous. Going back several weeks they are not happy with this whole peace plan, they are not happy even with the limited way the Ukrainian government is implementing it, they are not happy with the economic situation and they’ve got their own political issues with the government. So it was entirely predictable that they would protest today and given the kind of people they are it was entirely predictable these protests would be violent.
RT: How far are these protesters prepared to go?
AM: I think the protesters themselves are prepared to go very far indeed. I think some of them would probably want to see the government changed. The question is do they have the strength to achieve that and I think the answer is no.
RT: If there is a standoff here between these protesters and the government, Poroshenko in particular, who is going to come out on top here and how long this process is going to take?
AM: The danger is that neither is going to come out on top. I think what we are seeing in Ukraine is a stalemate situation. The government was talking some time ago about suppressing these people and it’s never got around to doing it, and it doesn’t seem to have the strength to do it. And these people in turn don’t seem to have the strength to overthrow the government. So we have a perpetual standoff with two sides, each antagonistic.
RT: What kind of reaction to this violence should we expect from Kiev’s allies in Europe? Are we going to see some condemnation?
AM: No, I don’t think there is going to be any at all. In fact, I think the media and Western governments are going to try to ignore this incident, however violent it is. Privately they will be very concerned, because of course if the situation escalates, or if whatever steps have been taken in Kiev towards decentralization proposals are derailed, then they will be left with a very difficult situation having committed themselves to a process and to a government that is obviously going down. But until that point is reached they will try and pretend it isn’t happening.
RT: An explosion has gone off near the parliament building. Who might have weapons able to cause that? These are not protesters, aren’t they?
AM: No, they are not protesters. The Right Sector and various other right-wing groups are better understood as armed right-wing militias. They’ve been involved in a military operation in the country’s east and some of them have had various military weapons that they have been supplied by the Ukrainian government and by various Ukrainian businessmen and politicians. So they are very heavily armed and very dangerous.
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The dollar’s 70-year dominance is coming to an end

5:30PM BST 19 Jul 2014

In early July 1944, delegates from 44 countries gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire. A three-week summit took place, at which a new system was agreed to regulate the international monetary and financial order after the Second World War.
The US was already the world’s commercial powerhouse, having eclipsed the British Empire several decades earlier. America was also on course to be among the victors of “Europe’s conflict”, even though its economy was largely unscathed by war. As such, Bretton Woods was US-dominated and produced a settlement largely on US terms.
Seventy years ago this week, that fateful summit ended. Its close marked the moment the dollar’s unquestionable supremacy was secured. Since then, global commerce has been conducted largely in dollars and leading economies have held the greenback as their primary reserve currency.
The same system remains intact today, with the lion’s share of commercial settlements worldwide still clearing the US banking system – even if the parties involved have nothing to do with the States.
The dollar’s hegemony continues to be cemented, meanwhile, by the operations of the International Monetary Fund and World Bank. Founded at Bretton Woods, they’re both Washington based, of course, and controlled by America, despite some Francophone window-dressing.

The advantages this system bestows on the US are enormous. “Reserve currency status” generates huge demand for dollars from governments and companies around the world, as they’re needed for reserves and trade. This has allowed successive American administrations to spend far more, year-in year-out, than is raised in tax and export revenue.
By the early Seventies, US economic dominance was so assured that even after President Nixon reneged on the dollar’s previously unshakeable convertibility into gold, amounting to a massive default, dollar demand kept growing.
So America doesn’t worry about balance of payments crises, as it can pay for imports in dollars the Federal Reserve can just print. And Washington keeps spending willy-nilly, as the world buys ever more Treasuries on the strength of regulatory imperative and the vast liquidity and size of the market for US sovereign debt.
It is this “exorbitant privilege” – as French statesman Valéry Giscard d’Estaing once sourly observed – that has been the bedrock of America’s post-war hegemony. It is the status of the dollar, above all, that’s allowed Washington to get its way, putting the financial squeeze on recalcitrant countries via the IMF while funding foreign wars. To understand politics and power it pays to follow the money. And for the past 70 years, the dollar has ruled the roost.
This won’t change anytime soon. Something just took place, though, which illustrates that dollar reserve currency status won’t last forever and could be seriously diluted. Last week, seven decades on from Bretton Woods, the governments of Brazil, Russia, India and China led a conference in the Brazilian city of Fortaleza to mark the establishment of a new development bank that, whatever diplomatic niceties are put on it, is intent on competing with the IMF and World Bank.
It’s long been obvious the BRICs are coming. The total annual output of these four economies has spiralled in recent years, to an astonishing $29.6  trillion (£17.3 trillion) last year on a PPP-basis adjusted for living costs. That’s within spitting distance of the $34.2 trillion generated by the US and European Union combined.
America’s GDP, incidentally, was $16.8 trillion on World Bank numbers, and China’s was $16.2 trillion – within a whisker of knocking the US off its perch. The balance of global economic power is on a knife-edge. Tomorrow is almost today.

Consider also that the BRICs collectively hold sway over 50pc of global currency reserves, rising to almost three-quarters if you take the emerging markets as a whole. The G7 nations between them control only 20pc – and less than 8pc if you exclude Japan.
Based on such balance sheets, we’re now seeing institutional change. The new BRICs Development Bank, modelled on the IMF, will have a $100bn currency reserve available to lend around the world, giving distressed debtor nations an alternative to the “Washington consensus”.
For a long time, the BRICs have been paying in to the IMF, yet been denied additional influence over what happens to the money. Belgium has more votes than Brazil, Canada more than China.
The institutions governing the global economy have failed to keep pace with reality. Modest reforms giving the large emerging markets more power, agreed with much fanfare in 2007 and again in 2010, have been stalled by Washington lawmakers. The BRICs have now called time, setting up their own, rival institution based in Shanghai.
The key to the dollar’s future is petrocurrency status – whether it’s used for trading oil and other leading commodities. Here, too, change is afoot. China’s voracious energy appetite and America’s increased focus on domestic production mean the days of dollar-priced energy look numbered.
Beijing has struck numerous agreements with Brazil and India that bypass the dollar. China and Russia have also set up rouble-yuan swaps pushing America’s currency out of the picture. But if Beijing and Moscow – the word’s largest energy importer and producer respectively – drop dollar energy pricing, America’s reserve currency status could unravel.
That would undermine the US Treasury market and seriously complicate Washington’s ability to finance its vast and still fast-growing $17.5  trillion of dollar-denominated debt.
In May, Beijing and Moscow signed a huge multi-decade gas supply contract, to sit alongside a similar oil deal agreed in 2009. No one knows what share of this energy trade will be on a yuan-rouble basis – and the two governments aren’t saying. This question, seemingly inane, is among the most important diplomatic issues of our time.
At the moment, although Russia’s export partners do sometimes settle in roubles, most Sino-Russian trade is still in dollars. But the combination of this new gas deal, and western sanctions on Russia – has seen Moscow and Beijing step up bilateral efforts to facilitate large-scale non-dollar settlement.
With western anti-Russia sanctions likely to be tightened again after the tragic shooting of a Malaysian passenger plane over Ukrainian airspace, Beijing’s response will be closely scrutinised. I, for one, expect the Chinese to say little until it’s clearly established who grounded the plane and why.
Although the dollar’s reserve status won’t end overnight, the global payments system is now moving inexorably towards that outcome. The US currency accounted for just 33pc of all foreign exchange holdings in 2013, on IMF numbers, down from 55pc in 2001.
Within a decade or so, a “reserve currency basket” may emerge, with central banks storing wealth in a mix of dollars, yuan, rupee, reals and roubles, as well as precious metals. Perhaps some kind of synthetic bundle of the world’s leading currencies will be developed, with emphasis placed, after years of western money-printing, on assets backed by commodities and other tangibles.
I also believe central banks may include cyber-currencies (such as bitcoin) in their reserves. If you think that’s mad, consider that mankind has long sought scarcity – be it with shells, stones or metallic elements – to store wealth. Now the money-printing taboo has been broken by yet another generation, it makes sense to use complex computer algorithms to ensure that only a certain amount of a particular currency unit can ever exist.
The dollar’s status is a big question. Judging the outcome is more akin to star-gazing than scientific economics. But the establishment of this BRIC Development bank, timed to coincide with the anniversary of Bretton Woods, is an audacious and significant move. The world’s emerging giants now have thumbscrews on the West.
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3 thoughts on “Putin Drafts Bill Dumping US Dollar Within CIS Countries”

  1. Can,t wait for EU to Fall, its not if but When, Also When germans wake up from the JEW Propagana stupour they are in, they will “JOIN RUSSIA” who have learnt their lessons from the Jew Bolsheviks. Soros & Rotschilds on the Run, Go Brics, WIN WIN & WORLD PEACE !

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