Tuesday, June 2, 2015
by Bill White
China, working with the governments if the United Kingdom and other European powers, has to moved further boot U.S.-controlled institutions like the International Monetary Fund and the World Bank from Asia, another sign of declining U.S. financial power.
In March, the United Kingdom declared that it would join China and 27 other nations including India, Australia, New Zealand, Indonesia, Thailand, Vietnam, the Philippines, Qatar and Iran, in founding the Asian Infrastructure Investment Bank, an instrument of Chinese foreign policy in the region. Days later, the UK was joined by Germany, France, and Italy. Led by China members of the bank would lend money to developing nations in Asia for roads, ports, and other infrastructure projects.
The bank builds on expanding Chinese influence in Asia, including Chinese government funded projects to develop a “New Silk Road” through Central Asia, and, Chinese government invests in ports in Sri Lanka and East Africa. China has also been working with Russia, Brazil, India and South Africa to develop the BRICS system, bank and currency investment agencies which would operate outside of the Bretton Woods system. The long term goal of these investments is to reduce American power as the world’s creditor nation and make China independent of the Bretton Woods system established after World War II, that made the world dependent on the U.S. dollar as the medium of global exchange.
Part of this growing independence has also been allowing Central Banks in nations from Australia to Switzerland to issue denominated Yuan. Previously, many Chinese trade transactions had to be conducted in dollars and were dependent upon the Federal Reserve System.
The United States responded to its rapidly diminishing power in East Asia, by demanding that allied nations repudiate their agreements with the Chinese. American concern about diminishing power was cloaked in concern about “banking standards,” with the U.S. claiming that the Chinese will use the banks as the U.S. uses the IMF-World Bank, as an instrument of foreign policy.
“We hope and expect that the UK will use its voice to push for the adoption of higher standards.” Patrick Vertrell, a spokesman for the National Security Council, told the press.
Britain’s decision to join the AIIB followed the failure of the Unites States to prevent its ally, Australia, from joining. Australia initially embraced the bank, then reversed position after a personal appeal from Barack Obama. Now, Australia stated it intends to go forward in joining the bank.
Similarly, U.S. ally South Korea, who had been pressured to repudiate the AIIB, seems likely to repudiate America and join.
The continued economic reorganization of the United States has followed from the country’s 2008 economic collapse and the failure of African-born President Barack Obama to revive the economy. While some major employers have recently raised wages in highly publicized moves, the U.S. economy has entered a deflationary period, with prices now falling at a rate of 0.5% per month, matching an 8% fall in wages since 2008 and a strengthening U.S. dollar internationally. The U.S. Federal Reserve had been staving off deflation by issuing trillions of dollars in additional currency, but, with that having ended, deflationary forces have taken over. Deflation is deadly to usury based economies, particularly ones as heavily in debt as that of the United States, because it makes debts more difficult or impossible to pay.
The rise of Chinese and other banking alternatives has also mirrored the reversal of U.S. power on the ground. Since 2008, the Chinese have pushed the U.S. and its allies back 200 miles from Chinese shores, while Iran’s effectively pushing the U.S. and its allies out of Iraq and Syria, and, Russia has successfully resisted a U.S.-Jewish coup in the Ukraine. To distract Americas from these failures, the U.S. government and its mass media have incited racial problems devoting most TV and print news coverage to largely imaginary negro grievances.