Geopolitical Considerations In The Midst Of The Bank Crisis

Earlier today commenter mistcr made what I considered to be an astute comment regarding Matthew Crawford’s take on SVB’s place in the Banking/Monetary crisis. Crawford himself refers to the entire business as part of the Monetary Wars. He’s currently up to Part 17. He’s a smart guy, especially when it comes to putting numerical data into larger patterns, and a talented writer. However, mistcr noted:

He has great insight into the patterns, especially showing the history of FED pivots back to the 70s. But without the geopolitics informing his analysis, he doesn't see the possibility that the FED is fighting CBDCs.

I responded that Crawford appears to view what’s going on in “a vacuum”, meaning, outside a much larger and multi-faceted global war that involves monetary, cultural, and political matters. At the least.

It happens that I came across some articles by Andrew Korybko—a Moscow (RF, not ID) based geopolitical analyst that provide some background that should convince skeptics that what’s going on with the banks in the West cannot be divorced from geopolitics. As usual, these are excerpts, focusing on what I view as some shrewd observations. While they concern recent events, the tie in to matters that go back some time is also clear.

I’ve pointed out in the past that India flies under the radar with regard to the war on Russia, but that the role it has played has been enormous. Korybko writes about India’s “leading role” in what is quite central to the Monetary Wars. India exerted this massive influence not by taking sides per se, but by following its own national interests:

India Takes A Leading Role In De-Dollarization

Reuters reported on Wednesday that “India’s Oil Deals With Russia Dent Decades-Old Dollar Dominance”, which informed their audience that the growing trend of those two using national or third-party currencies like the UAE’s is something significant for everyone to pay attention to. To that outlet’s credit, it also reminded readers that IMF Deputy Managing Director Gita Gopinath foresaw in the month after Russia’s special operation began that the West’s sanctions “could erode the dollar’s dominance”.

That should suggest the recklessness of the Neocon war on Russia, if the impact on accelerating de-dollarization was seen that long ago.

Had India complied with the US’ illegal sanctions, then the New York Times wouldn’t have recently admitted that those restrictions failed just like the West’s efforts to “isolate” Russia did as well. It was largely due to that South Asian Great Power’s truly independent grand strategy that this latest phase of the New Cold War didn’t decisively end in the Golden Billion’s victory over Russia and the restoration of unipolarity, which would have been detrimental to India and every other developing country’s interests.

India therefore changed the course of history by remaining committed to the pursuit of its objective national interests, which to remind everyone, aren’t driven by any desire to harm the interests of third parties like the US. Its leading role in de-dollarization via its increasing number of non-dollar-denominated energy deals with Russia is also reshaping the global financial system by reducing that currency’s prior dominance and thus leading to a more multipolar state of affairs for everyone.

The next paragraph refers to a matter that we discussed briefly—the recent major uptick in pressure being placed on India by the US. Which appears to have fallen flat.

Even the US itself seems to have finally accepted that it can’t reverse this trend, which is evidenced by former Indian Ambassador to Russia Kanwal Sibal recently telling TASS that “Lately, the discourse from Washington has changed and India is no longer being asked to stop buying oil from Russia. In a recent visit to India, the US Treasury Secretary [Yellen] actually said that India can buy discounted oil from Russia as much as it wants so long as western tankers and insurance companies are not used.”

Imagine, Yellen telling India what it can and can’t do.

Nevertheless, radical liberal–globalist ideologues like Color Revolution mastermind George Soros are still desperately clinging to the dream of restoring the US’ rapidly declining unipolar hegemony, hence why he de facto declared Hybrid War against India during the Munich Security Conference last month. It remains unclear whether he and his network have enough support in the Western Establishment to advance that regime change agenda, but his threat is still worrisome and should be taken seriously.

Next up, the Iranian - Saudi rapprochement. Here we see discussion of new trade route developments that we have repeatedly discussed:

The Iranian-Saudi Rapprochement Will Deal A Deathblow To The Dollar

There’s no doubt that upcoming Saudi moves in support of the petroyuan that are taken in coordination with Iran and Russia would catalyze the next natural phase of de-dollarization. Russian-GCC real-sector trade that’ll be carried out via Iran across the North-South Transport Corridor will be conducted in national currencies and thus prepare those three for the moment when they finally decide to deal a deathblow to the petrodollar.

Eurasia’s geo-economic integration took a great leap forward as a result of the Iranian–Saudi rapprochement, which unlocks the Gulf Cooperation Council’s (GCC) trade potential with Russia and China. Its wealthy members can now tap into two series of Iranian-transiting megaprojects in one fell swoop through this deal, with the North-South Transport Corridor (NSTC) connecting them to Russia while the China-Central Asia-West Asia Economic Corridor (CCAWAEC) will do the same vis-à-vis China.

…

Without last week’s Beijing-brokered deal, China would have had to rely on maritime routes under the control of the powerful US Navy to facilitate the forthcoming explosion in bilateral real-sector trade, but now everything can be conducted much more securely via the Iranian-transiting CCAWAEC. Looking forward, there’s also a theoretical possibility of Chinese energy investments in Iran connecting the Gulf to Central Asia and thenceforth to the People’s Republic, thus fully securing its strategic interests.

...

Once this major oil exporter begins to sell its resources in non-dollar-denominated currencies like China’s, then the petrodollar upon which the economic-financial aspect of the US’ unipolar hegemony is predicated will be dealt a deathblow. The global systemic transition to multipolarity and the impending trifurcation of International Relations that will precede the final inevitable form of this process would unprecedentedly accelerate once this happens, thus further hastening America’s ongoing demise.

About those aforementioned processes, they were already made irreversible by the special operation that Russia was forced to commence in defense of its national security red lines in Ukraine after NATO clandestinely crossed them there and subsequently rejected Moscow’s security guarantee requests for politically resolving their resultant security dilemma. Over the past year, the New York Times was forced to admit that not only did the sanctions fail, but even the plot to “isolate” Russia did too.

Once again, we know that Powell at the Fed is thinking about these matters. He has publicly stated that he has no problem, in principle, with multiple reserve currencies. That implies strongly that he is thinking in terms of a major restructuring of the world monetary system. That can’t help but play into his strictly domestic considerations, if we presume he favors a strong dollar on the world scene—which he does.

Finally, we return to Iran, Saudi Arabia … and India. Iran is central to so much of what’s going on, in virtue of its geographical position:

Reassessing Mohammed Bin Salman’s Geostrategic Vision In Light Of His Rapprochement With Iran

The preceding assessment explains why MBS authorized his representatives to clinch last week’s deal with Iran in China, which stands the credible chance of ultimately dealing a deathblow to the dollar upon those three and Russia’s seemingly inevitable moves in support of the “petroyuan”. ...

Just like India, Saudi Arabia is doing its best to balance between the US-led West’s Golden Billion and the Sino-Russo Entente in the New Cold War over the direction of the global systemic transition. To that end, those two retain a foot in each de facto bloc, but there’s no doubt that their enduring interests are most effectively ensured in the emerging Multipolar World Order that the Sino-Russo Entente is building than in a restoration of the unipolar one that the Golden Billion wants to return International Relations to.

The occasional difficulties in each of their ties with the US aren’t due to any fault of their own, but are entirely the result of that declining unipolar hegemon refusing to recognize their objective interests and related sovereign right to pursue them. For instance, the US is enraged that they won’t ditch Russia like it demands, instead flexing their sovereign right to double down on that vector of their foreign policies precisely because it serves their interests and thus facing its rhetorical wrath in response.

Even so, the US is reluctant to meaningfully punish either of those increasingly influential players on the world stage out of fear that doing so would push them closer into Russia’s arms, which would accelerate the global systemic transition’s continual movement towards multipolarity. Saudi Arabia and India can therefore be seen as somewhat similarly placed at this point in International Relations in the sense that they have complementary balancing acts that are regularly recalibrated in response to US pressure.

One could also interpret the huge US campaign of war mongering towards China as another effort to coervively pry a key ally away from its support of Russia. China’s own interests are far too bound up with Eurasian integration for that to happen—IMO.