Escobar Exposes Real BRICS Bombshell: Putin's "Fair Multipolar World" Where Oil Trade Bypasses The Dollar

Tyler Durden's picture

Authored by Pepe Escobar via The Asia Times,

Putin reveals 'fair multipolar world' concept in which oil contracts could bypass the US dollar and be traded with oil, yuan and gold...

The annual BRICS summit in Xiamen – where President Xi Jinping was once mayor – could not intervene in a more incandescent geopolitical context.

Once again, it’s essential to keep in mind that the current core of BRICS is “RC”; the Russia-China strategic partnership. So in the Korean peninsula chessboard, RC context – with both nations sharing borders with the DPRK – is primordial.

Beijing has imposed a definitive veto on war – of which the Pentagon is very much aware.

Pyongyang’s sixth nuclear test, although planned way in advance, happened only three days after two nuclear-capable US B-1B strategic bombers conducted their own “test” alongside four F-35Bs and a few Japanese F-15s.

Everyone familiar with the Korean peninsula chessboard knew there would be a DPRK response to these barely disguised “decapitation” tests.

So it’s back to the only sound proposition on the table: the RC “double freeze”. Freeze on US/Japan/South Korea military drills; freeze on North Korea’s nuclear program; diplomacy takes over.

The White House, instead, has evoked ominous “nuclear capabilities” as a conflict resolution mechanism.

Gold mining in the Amazon, anyone?

On the Doklam plateau front, at least New Delhi and Beijing decided, after two tense months, on “expeditious disengagement” of their border troops. This decision was directly linked to the approaching BRICS summit – where both India and China were set to lose face big time.

Indian Prime Minister Narendra Modi had already tried a similar disruption gambit prior to the BRICS Goa summit last year. Then, he was adamant that Pakistan should be declared a “terrorist state”. The RC duly vetoed it.

Modi also ostensively boycotted the Belt and Road Initiative (BRI) summit in Hangzhou last May, essentially because of the China-Pakistan Economic Corridor (CPEC).

India and Japan are dreaming of countering BRI with a semblance of connectivity project; the Asia-Africa Growth Corridor (AAGC). To believe that the AAGC – with a fraction of the reach, breath, scope and funds available to BRI – may steal its thunder, is to enter prime wishful-thinking territory.

Still, Modi emitted some positive signs in Xiamen; “We are in mission-mode to eradicate poverty; to ensure health, sanitation, skills, food security, gender equality, energy, education.” Without this mammoth effort, India’s lofty geopolitical dreams are D.O.A.

Brazil, for its part, is immersed in a larger-than-life socio-political tragedy, “led” by a Dracula-esque, corrupt non-entity; Temer The Usurper. Brazil’s President, Michel Temer, hit Xiamen eager to peddle “his” 57 major, ongoing privatizations to Chinese investors – complete with corporate gold mining in an Amazon nature reserve the size of Denmark. Add to it massive social spending austerity and hardcore anti-labor legislation, and one’s got the picture of Brazil currently being run by Wall Street. The name of the game is to profit from the loot, fast.

The BRICS’ New Development Bank (NDB) – a counterpart to the World Bank – is predictably derided all across the Beltway. Xiamen showed how the NDB is only starting to finance BRICS projects. It’s misguided to compare it with the Asian Infrastructure Investment Bank (AIIB). They will be investing in different types of projects – with the AIIB more focused on BRI. Their aim is complementary.

‘BRICS Plus’ or bust

On the global stage, the BRICS are already a major nuisance to the unipolar order. Xi politely put it in Xiamen as “we five countries [should] play a more active part in global governance”.

And right on cue Xiamen introduced “dialogues” with Mexico, Egypt, Thailand, Guinea and Tajikistan; that’s part of the road map for  “BRICS Plus” – Beijing’s conceptualization, proposed last March by Foreign Minister Wang Yi, for expanding partnership/cooperation.

A further instance of “BRICS Plus” can be detected in the possible launch, before the end of 2017, of the Regional Comprehensive Economic Partnership (RCEP) – in the wake of the death of TPP.

Contrary to a torrent of Western spin, RCEP is not “led” by China.

Japan is part of it – and so is India and Australia alongside the 10 ASEAN members. The burning question is what kind of games New Delhi may be playing to stall RCEP in parallel to boycotting BRI.

Patrick Bond in Johannesburg has developed an important critique, arguing that “centrifugal economic forces” are breaking up the BRICS, thanks to over-production, excessive debt and de-globalization. He interprets the process as “the failure of Xi’s desired centripetal capitalism.”

It doesn’t have to be this way. Never underestimate the power of Chinese centripetal capitalism – especially when BRI hits a higher gear.

Meet the oil/yuan/gold triad

It’s when President Putin starts talking that the BRICS reveal their true bombshell. Geopolitically and geo-economically, Putin’s emphasis is on a “fair multipolar world”, and “against protectionism and new barriers in global trade.” The message is straight to the point.

The Syria game-changer – where Beijing silently but firmly supported Moscow – had to be evoked; “It was largely thanks to the efforts of Russia and other concerned countries that conditions have been created to improve the situation in Syria.”

On the Korean peninsula, it’s clear how RC think in unison; “The situation is balancing on the brink of a large-scale conflict.”

Putin’s judgment is as scathing as the – RC-proposed – possible solution is sound; “Putting pressure on Pyongyang to stop its nuclear missile program is misguided and futile. The region’s problems should only be settled through a direct dialogue of all the parties concerned without any preconditions.”

Putin’s – and Xi’s – concept of multilateral order is clearly visible in the wide-ranging Xiamen Declaration, which proposes an “Afghan-led and Afghan-owned” peace and national reconciliation process, “including the Moscow Format of consultations” and the “Heart of Asia-Istanbul process”.

That’s code for an all-Asian (and not Western) Afghan solution brokered by the Shanghai Cooperation Organization (SCO), led by RC, and of which Afghanistan is an observer and future full member.

And then, Putin delivers the clincher;

“Russia shares the BRICS countries’ concerns over the unfairness of the global financial and economic architecture, which does not give due regard to the growing weight of the emerging economies. We are ready to work together with our partners to promote international financial regulation reforms and to overcome the excessive domination of the limited number of reserve currencies.”

“To overcome the excessive domination of the limited number of reserve currencies” is the politest way of stating what the BRICS have been discussing for years now; how to bypass the US dollar, as well as the petrodollar.

Beijing is ready to step up the game. Soon China will launch a crude oil futures contract priced in yuan and convertible into gold.

This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan.

Inbuilt in the move is a true Chinese win-win; the yuan will be fully convertible into gold on both the Shanghai and Hong Kong exchanges.

The new triad of oil, yuan and gold is actually a win-win-win. No problem at all if energy providers prefer to be paid in physical gold instead of yuan. The key message is the US dollar being bypassed.

RC – via the Russian Central Bank and the People’s Bank of China – have been developing ruble-yuan swaps for quite a while now.

Once that moves beyond the BRICS to aspiring “BRICS Plus” members and then all across the Global South, Washington’s reaction is bound to be nuclear (hopefully, not literally).

Washington’s strategic doctrine rules RC should not be allowed by any means to be preponderant along the Eurasian landmass. Yet what the BRICS have in store geo-economically does not concern only Eurasia – but the whole Global South.

Sections of the War Party in Washington bent on instrumentalizing  India against China – or against RC – may be in for a rude awakening. As much as the BRICS may be currently facing varied waves of economic turmoil, the daring long-term road map, way beyond the Xiamen Declaration, is very much in place.

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brockhardman's picture

Queue next false flag stat.

Jim in MN's picture

Ooooh, we be MIRVin' that shit so bad

TBT or not TBT's picture

Actually we just need rule of law restored and we'll dominate for another century.   Russia and China and Brazil and whoever do not have it.  

divingengineer's picture

Takes more than oil to run an empire, but it does help.
Smart ass mother fuckers are going to be learning the hard way, I think.
Oh well, fuck em anyway.

besnook's picture

so naive. money rules the world. the root of money has always been energy. oil rules the world. the usa stole all of it with the petrodollar. petrogold ends the dollar rule and petrogold equalizes everyone's currency..

Eeyores Enigma's picture

I'm sure the US elites will throw up their hands and start waving the white flag any minute now.

Rubicon727's picture

FINALLY! Zerohedge is covering one of Pepe Escobar's articles! Thank you.

Now we can read a slew of his articles at He's been writing about this Asian shift and how it threatens US$$$/military hegemony for at least two years. What he relates fits squarely with the US aims behind the propoganda against North Korea.

Fits perfectly!!

abyssinian's picture

Fuck the USD, useless piece of shit paper. 

Yen Cross's picture

 Excuse me, I burped.

  I'd like to hear your alternatives????

  You realize China is 35% deeper in debt, and has an antiquated economy, about the same size, with 5x the mouths to feed?

Duc888's picture



How much extenal debt?

Yen Cross's picture

    I'm a bit confused?   If you don't mind, please elaborate?

 So basicallly, you're stating that the $usd as a reserve currency, inherently carrries more debt than triple rehypothecated chinese steel and copper and ghost cities made from fake concrete?

   You're stating that the United States can't absorb all of the Chinese debt in Treasuries, and tell China to go steal Jet Engine technology from someone else?

  Is that what you're saying!!!?

  China is toast without the United States. It's a sickening symbiotic relationship.

Mr 9x19's picture

antiquated economy ? lol, they just produce 85% of all the shit you use DAILY..


don't be a bastard, have some respect to those making cheaper products our countries cannot make anymore because they taxe between 20 to 60% any revenue....



antiquated... lol...

Yen Cross's picture

  They live in rivers of smog produced by factories that are unregulated, and run on 50's 60's era technology. YES ASSCLOWN= antiquated

  Additionally, have you taken the time to look at the trade deficit with China lately? Dumbass

  Chinese trinkets aren't so popular.

  Now go fry me some stale riverpork, you assclown.

SoDamnMad's picture

And the Chinese who made waves against us backing out of the Paris Accord are financing and constructing coal fired power plants all across Africa while their country "dies" under the air, water and food pollution their remarkable manufacturing economy has created. And I think the Amazon and E Bay knock-offs are a bunch of crap along with the other trinkets they produce.

eishund's picture

maglev + quantum computer. they don't sound "antiquated" to me...just sayin ye noe....oh yeah, they're the new colonial masters of africa too. cutting down all the "antiquated" trees, the last i heard.

trulz4lulz's picture

They also just invented and demonstrated their quantum telecommunications technology underwater, used quantum teleportation of information by entangling photons with info and also can build hundred kilometer long bridges, roads and massive infrastructure in a fraction of the time it takes Ameeica to buil a curb and repave a 4block section of a neighborhood.

Joiningupthedots's picture

That is the correct question.

Chinese debt is mostly internal.

American debt is mostly external.

besnook's picture

financed by their current account surplus, the japanese model.

Ignorance is bliss's picture

Who cares about China's external debt. It's why GOLD is desirable. It holds value..there isn't any counterparts risk. Oil for gold...not oil for Yuan.

lasvegaspersona's picture

Gold (aT A HIGHER PRICE) in combo with truly free  floating currencies, would work.

No reserve currency needed. It was a bad idea all along anyway.

Yen Cross's picture

 Gold is so undervalued. When the 100:1 paper promises unwind, shit is going parabolic.

  I'm actually liquidating some  Ag     to fill some  Au   Physical holes .  Margin management.

GoldenDonuts's picture

But their political system is so well run and transparent.  The unwashed secure in the knowledge that the feudal system that they have will work for them.   There won't be any civil unrest.

Yen Cross's picture

   I rather invest in Indian debt, which after Modi is gone, looks rather promising.

eishund's picture

Good luck. There is a reason why we have grey matter. go do some research on india.

webmatex's picture

China has NO foreign creditors.

Also has couple trill under the bed.

HRClinton's picture

Not so fast. If only we had a "US Dollar". Issued debt-free by the Treasury. 

As it is, we have the FRN (((ZIODOLLAR))), to enable the (((Usurpers))) to live off our lifeblood of ideas, innovation, labor, resources, rent, taxes, and warriors. 

fattail's picture

Why is there no petro Yuan?  Why does the oil futures contract in Yuan need to be backed by gold?  Because the yuan is not free floating and is tightly controlled in china.  If the yuan was a global currency it would be closer in value to the mexican peso than the dollar and everyone knows it.  

Sure we will take your yuan currency for our oil, just as soon as you let us convert your yuan to gold.  I believe that says it all.

Ignorance is bliss's picture

Your point doesn't fix the Dollar problem. Who gives a shit about China? What matters is what's in your wallet and what will it buy.

eishund's picture

if the rmb is floating, it will be whacked by the masters of the universe using all kinds of wmds. cmon, this is basic. the chinese ain't stupid. they learnt.

Reaper's picture

The Petro dollar heads to pasture.

MozartIII's picture

Yes it does! This was anounced a week ago with china backing oil contracts with gold! If China takes out North Korea, the US has nothing left.

TahoeBilly2012's picture

So Jim Willie and his "gold trade note" was right all along? Wow! He has been calling this for 10 years. 

OpenThePodBayDoorHAL's picture

It's a fantasy. What would the US do if China backed the yuan with gold? Just print a boatload of USDs and buy all the yuan in sight. That way they'd get free gold, plus the yuan would soar. Win-win. China is already a high wage country compared to Vietnam, Africa etc. 

Stinkytofu's picture

how are the contracts backed by gold?


"China's move will allow exporters such as Russia and Iran to circumvent U.S. sanctions by trading in yuan.

To further entice trade, China says the yuan will be fully convertible into gold on exchanges in Shanghai and Hong Kong."


those contracts are just contracts priced in yuan, in no way backed by gold.  sellers have the ability now to

convert yuans to gold, totally separate transaction.  will be interesting to see how the chinesers implement the

conversion program, and what limitiations are attached.


if the yuan was freely convertible to knockoff i-phones in hongkong, could you claim china's oil futures contracts

were backed by i-phones?


yogibear's picture

Kill the US dollar, thanks to the Federal Reserve's printing abuse, and a country wins against the US without firing a shot.

Bigly's picture

Gold, bitchez

Implied Violins's picture

Yup. Even so, I'd be keeping a VERY close eye on this BRICS shit. If the same people at the BIS and IMF end up on the board of this bank, then we've been had. That word "multipolar" was brewed up by these same (((people))), after all. It's a keyword I am watching very, VERY closely.

END THE FED is NOT enough. END the BIS and IMF and throw ALL of them into jail. Then nuke it from orbit just to be sure.

therealestg9's picture

Dude...THANK YOU! You took the words right out of my mouth. I have always been just as skeptical of the whole One-Belt One-Road (OBOR) project since I first heard of it. To me, the name itself screams "One World Order". China has observed the US trying to maintain a global financial empire, and now feels that it is up to the challenge of creating its own. This OBOR project is all about financial integration and more authoritative control of the state over people's capital. It is basically a sort of EU for Eurasia. The only people it's going to be benefiting are the rich Chinese and Russian authoritarian bureaucrats who will see their power multiply, while the average Chinese or Russian will see their jobs shipped off to wherever's cheaper, probably Vietnam or something like that. Sound familiar? Sounds like Eurasian globalism to me...

Implied Violins's picture

Yup yup yup. Agree with all of it.

And you know what this reminds me of? Check out this chart:

That's the history of the Reserve Currency. Notice how regular the changes have been over the last several hundred years: every 70-100 years, there is strife, war, then a transfer of control from one country to another (while assimilating their gains - and loaning to their previous victim for 'reconstruction').

It's like some kind of parasite that infests a 'host' country, sucks it dry, then finds another victim and profits from the husk of its former victim while it sets up a new 'home'. (((They))) are like a tapeworm. Or lice. Fleas. Syphilis. Etc. And they need EXTERMINATING!!!

Vigilante's picture

I thought they were exterminated in the Holohoax

besnook's picture

therein lies the rub. the zionazis have been excluded from the new world order of finance and they will not sit idly by and watch their history end after 500 years of dominance.

We Are The Priests's picture

What's to stop the AIIB, the Shenghai Exchange, and the BRICS, primarily RC, from doing the very same thing the FED, BIS, and IMF have done?  Don't forget, Russia and China, especially China, have been willing participants in the current fiat currency, debt derivitive ponzi scheme.  Not only that, but they've outplayed the creators of the game and have thoroughly beaten them.

Once China and Russia are in control, and they will win control, what's to stop them from starting the same game all over again, just with a new set of rules and game pieces?

Seriously folks, the new game will be the same as the old game, just with new packaging and a few 21st century upgrades.

"Say hello to the new boss.  Same as the old boss."

pitz's picture

Bypasses the dollar?  Oil has been purchased or sold in non-dollar currencies for a long time now.   The "petrodollar" is just conspiracy theory.

Omega_Man's picture

Merica are losers.. and will lose.... who wants their shit dollar anymore... it's garbage... we want GOLD

Xena fobe's picture

We don't want your products.  Never did.  Nor your colonists.