As regular readers know, we’ve variously described the China-led Asian Infrastructure Investment Bank as representing both an attempt by China to cement its regional dominance by implicitly adopting a sino-Monroe Doctrine, as indicative of Beijing’s desire to supplant to US-dominated multinational institutions that have been a fixture of the post WWII economic world order, and, perhaps most importantly, as a not-so-subtle indication that dollar hegemony may be on the way out and yuan hegemony may be around the corner.
Essentially the AIIB will (either intentionally or unintentionally depending on who you believe) serve as an instrument of Chinese foreign policy and any hope of keeping this between the people who are privy to the country’s various hidden agendas (because all countries have agendas), went out the window early last month when the UK staged a coup by breaking with Washington and joining the development bank triggering a flood of applications from Western countries and culminating in membership bids from US “allies” Australia, Israel, and even Canada. Adding insult to injury, the AIIB is now looking to hire officials away from the World Bank and rival ADB.
Amid the March membership frenzy, Beijing sought to play down the degree to which the venture would serve to help establish a new world economic order with China at the helm. An article which appeared in The Global Times (a paper run by the state-controlled People’s Daily) very specifically denied any notion that China has designed on establishing a yuan-based global economic system. Here’s an excerpt:
The establishment of the Asian Infrastructure Investment Bank (AIIB) has been depicted by a few overseas media outlets as if China is building its own version of the Bretton Woods system...
Some foreign observers claim that the AIIB is the beginning of the Chinese yuan’s hegemony. What they are actually trying to imply is that “China is another US.”
This kind of statement is nonsensical, which uses historical experience to fool readers. It is divorced from the truth and shows no common sense and doesn’t stand up to any scrutiny.
Through the Bretton Woods system, the US was able to wield supreme influence over its allies which had been severely battered during the war. China today is in a totally different position.
The AIIB will not confront the WB or IMF, nor will it turn the current international monetary order upside down. The spirit of the AIIB is diversity and justice.
GRANTS PASS, Oregon — Some local constitutional activists have gathered in southern Oregon to support gold miners in a dispute with the federal government.
The very same people that caused the last economic crisis have created a 278 TRILLION dollar derivatives time bomb that could go off at any moment. When this absolutely colossal bubble does implode, we are going to be faced with the worst economic crash in the history of the United States. During the last financial crisis, our politicians promised us that they would make sure that “too big to fail” would never be a problem again. Instead, as you will see below, those banks have actually gotten far larger since then. So now we really can’t afford for them to fail. The six banks that I am talking about are JPMorgan Chase, Citibank, Goldman Sachs, Bank of America, Morgan Stanley and Wells Fargo. When you add up all of their exposure to derivatives, it comes to a grand total of more than 278 trillion dollars. But when you add up all of the assets of all six banks combined, it only comes to a grand total of about 9.8 trillion dollars. In other words, these “too big to fail” banks have exposure to derivatives that is more than 28 times greater than their total assets. This is complete and utter insanity, and yet nobody seems too alarmed about it. For the moment, those banks are still making lots of money and funding the campaigns of our most prominent politicians. Right now there is no incentive for them to stop their incredibly reckless gambling so they are just going to keep on doing it.
