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

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.


falak pema Sep 7, 2017 9:25 AM Permalink

Keep the petro in petrodollar and drop the $...Elementary my dear Watson; once you have belled the cat of Pax Americana! Are we truly there? Looks like the Duck is now considered Duck Soup à la Groucho in those BRICS and stones !Sticks and Stones may hurt my bones but words of Fire and Fury; fie fi fo fum; won't!

Precious Hawk Sep 7, 2017 4:34 AM Permalink

So why is Modi acting in league with the Banksters of the west?He has tried and tested their path to "one world - one currency" despite the fact that it dented the Indian economy.PH

just the tip Sep 7, 2017 3:57 AM Permalink

regardless of what you think of the dollar.  i've not read anywhere of the financial mechanics of the oil-yuan-gold transfers.  so i'm going to make up some mechanics of my own.  china buys oil.  china offers yuan.  ragheads want gold.  china transfer title of gold to ragheads.  they transfer the title of gold to the this point i am going to invent an expression that never has been uttered and no one at ZH has ever heard before. /sarcif you can't hold it in your hand, you don't own guess is china will be happy to transfer title of the gold to whomever, and for safe keeping we'll just hold onto it ourselves.  now you buy some of this rebar you really don't need from us.  and we'll pay you in gold we are holding for us.

Ignorance is bliss just the tip Sep 7, 2017 7:55 AM Permalink

Raghead sells oil for Yuan. Goes to SGE or HKGE buys gold with Yuan. Puts it gold in his pocket for the future when he runs out of oil. Since Raghead has gold he doesn't sell oil in Dollars. The U.S. Is short 9 Billion barrels of oil per annum. That's how much we import on an annual basis. U.S. Industry shuts down. Raghead must now buy refrigerators and cars from the last major industrial power...China. Raghead Decides to sell oil for refrigerators, food, clothes, etc..America suffers with a 50% oil deficit. Military and militarized units hog the petrol. Mad max depopulation scenario unfolds. Elite hang from light poles.

In reply to by just the tip

Fireman just the tip Sep 7, 2017 5:14 AM Permalink

You sound like Tricky Dicky when a bust USSA bit off more than it could chew in Vietnam and USSA defaulted on the dollar. Since then the Ki$$inger Saudi Mercan IOU I$I$ backed petroscrip toilet paper Pentacon dollah has had a good run...however, the jig is up and the chosenite bankster Ponzi sewer is about to blow. Hold onto your hats because Katrina, Harvey, Irma and Jose will seem like rather tame party guests when the tsunami of toxic derivative shit of Pentacon's incessant bouts of global slaughter finally have to be paid for. They will...on Merca's mean and bloodied streets! As for China not backing the Yuan with actual real, in your hand shiny gold... the trade certificates WILL be redeemable both in Shanghai and Hong Kong to begin with and then globally at those famous dim sum hubs i.e. Frankfurt, London which have already been set up. Get ready for Jim Willie's long foretold Scheiße dollah coming home to Slumville real sooooon.

In reply to by just the tip

Rebelrebel7 (not verified) Sep 7, 2017 3:51 AM Permalink

I guess that it is not surprising that Brazil is selling assets off to China since the president of its central bank,  Israeli Ilan Goldfajin, uses Israeli Stanley Fisher as his advisor. Perhaps this is the personal business that Stan " the man" announced his retirement for today!And to think that we owe this entire cabal of international robbers to the liberals hero John Maynard Keynes who started the IMF and World Bank, and the punchline is that he did it to end poverty! For whom?! The bankers?!That's progress for ya!

Brazen Heist Sep 7, 2017 3:04 AM Permalink

Good. The sooner the better. Bypass the Wahhabi Dollar. America never learnt what thrift is. The sooner demand for the dollar drops, the less the bloated US regime can borrow and spend on bullshit projects and learn to be more frugal. Win win for all, except for the cabal.

RedDwarf Sep 7, 2017 2:17 AM Permalink

Most of the rest of the world wants to see the end of the dollar hegemony.  The central banker elites overreached themselves and the house of cards is going to come down.

We Are The Priests Sep 7, 2017 1:27 AM Permalink

In reading the comments, it's clear that many want to see the death of the USD.  Hell, We here at the Temple of Syrinx share in the desire.  However, We wonder how many folks cheering on the demise of the USD--especially if they're US citiznes--understand the consequences of this now foregone conclusion; let alone whether or not they're prepared to deal with those consequences.Yes, Jim Willie has been talking about China and the gold trade note for some time now and this little tid-bit of news shows us once again that Jim, although a little on the wild side, is certainly not crazy and apparantly knows what the fuck he's talking about.If you haven't been listening to Jim regarding this move by China, then you've also been missing his predictions for the consequences of the USD's death via the destruction of the petro-dollar; which is, primarily, the creation of a new dollar for domestic use only inside of the US.  Jim calls it the "scheisse" dollar.  For those of you who don't know, scheisse is german for shit.What's most important to Jims "sheisse" dollar prediction, which, by the way, he also predicts will be a note issued by Treasury and not the Fed, is the requirement that China will place on the US to immediately upon issuance devalue the new dollar by 70%--think of this as punishment for having fucked shit up so badly.  Jim predicts this devaluation will occur in two stages, likely over a period of 6 months to a year after initial issuance.All you need to think about to understand this is this: What will your standard of living be 6 months to a year after you lose 70% of any and all wealth denominated in USD; especially if all your wealth is presently held, or maybe we should say, symbolically represented by 1's and zero's on E-Trade's computer network--or, whatever 3rd party you utilize to store your wealth?I hope this helps a few folks understand the clear and present danger that the death of the dollar represents and why it is so important to get out of any and all USD denominated assets and into hard assets like PM's.And no, We here at the Temple of Syrinx don't believe crypto's are the answer; that is, unless you think the answer is to exchange one system of control for another.  It is our belief that crypto's are the monetary version of controlled opposition.

soyungato Sep 7, 2017 1:02 AM Permalink

The day when a fat secretary doing nothing useful all day can have three cars in her garage, imported wines in her refrigeratior, will be over soon.

soyungato Sep 7, 2017 12:58 AM Permalink

"Washington’s reaction is bound to be nuclear!" True if the transition is abrupt. However, I doubt the petrodollar will be killed abruptly. More likely it will die slowly then the speed picks up. By the time people think $5000/Oz gold is cheap, it will be too late.

Yen Cross Sep 7, 2017 12:56 AM Permalink

    Tell me I'm wrong?   This has the making of a movie of epic proportions.  Scarface Shawshank Redemption = Combined Executive Producer: Steven Mnuchin & the guys from Entourage.  Giant </sarc>

Thugocracy Sep 7, 2017 12:53 AM Permalink

If Progressives weren't so damn greedy, this reserve currency racket might have gone on forever. Just print money and buy stuff. Wow!! Then they figured out they could buy votes.......

onmail1 Sep 7, 2017 12:35 AM Permalink

Cheers to PutinCheers to ChinaCheers to India& cheers to rest of the BRICSDUMP THE DOLLAR NOWDollar , Euro, pound these are symbol of slavery to westand refuse to take money from IMF, World bank etc western agenciesTrade in local currencies=============But btw India is in turmoilthe present govt is whitewashing everythingand putting all dirt under the carpetits defacto head is Jetley an unelected dictatorwho is very happy to make many billions from exceesive tax GSTwhile GST is good but what good it is if tax changes from 14% to 28%its downright sucking blood of pplWhen govt is happy that it made huge billions, know thatits the ppl who have to pay it , and combined with 30% income tax,total tax is more than erstwhile muslim mughal dynasty.The finance ministry's auditors make corrupt dealings withcompanies in return for favors in kind such as jobs for their kin etcThe ruling govt pretends to to be hindoobut behind this fascade its goons are killing ppl inthe name of protecting animals(cows), which is bigger Cow or human(weightwise cow is bigger hah ha)The same hindoos were killing & sacrificing cows in ancient timesMany saints are being jailed & blamedThe ruling party runs DAV schools , it has come to lightthat 8 year old girls are raped in these schools every yearand the ruling junta simply makes the matters vanishsince the administration is in their hands(no records, no charges recorded)Rampant corruption everywhereJudiciary is simply corrupt to the core, one of the most corruptJudges take huge bribes to settle casesbehind sceneschiefs of armed forces are regularly exposed for selling secretsministries ppl use public sector to do huge corruption ingiving huge contracts in return for getting good jobs for their relatives

We Are The Priests Sep 7, 2017 12:13 AM Permalink

China announcing the gold backed yuan denominated oil contract is absolutely fucking huge and with Putin now confirming on a global stage that the endgame of the BRICS has always been to bypass, even kill if necessary, the USD/Petrodollar (not that most of us needed Putin to confirm what we already knew), we now know the die has been fully cast and the death of the petro-dollar is imminent--as in, just as soon as any one of the OPEC countries signs up for the yuan-oil contract.  Hmmm, I wonder who it might be?  House of Saud, maybe?The other piece of the puzzle here for RC is CIPS, which is critical to the effort of detaching from SWIFT.  This is where the IMF and the SDR comes into play.  China nor Russia want global reserve currency status.  What they want is to control the primary mechanisms of trade--this has, for centuries, been at the core of the East/West Wealth Transfer Cycle.  Making the SDR the global reserve currency moves that responsibility away from RC, but by getting the Yuan into the SDR basket they're allowed to maintain a strong stake in the present global fiat currency ponzi scheme; a scheme that RC needs to keep going for just a bit longer--primarily to keep gold prices suppressed during their present buying spree, and to buy them time to finish building out the CIPS infrastructure.The announcement and the confirmation indicates to us that the buildout of CIPS has been completed and the system is ready to transact trade on a global scale.  We don't regularly track the progress of CIPS, so this final claim is, as of yet, unverified, and, therefore, speculation.  However, knowing that the Chinese fully subscribe to the Sun Tzu doctrine of, "Win the war before entering battle," we feel fairly confident in the veracity of such a claim.

LostandFound We Are The Priests Sep 7, 2017 5:27 AM Permalink

Putin is on record saying that the Petrodollar must die, i remember reading that on ZH a few years ago. If you look at the oil import percentile by China from the GCC nations, it almost equates to 50%. In other words the GCC countries cannot afford to lose China as a client without going into degradation. I suspect once Saudi starts accepting Yuan for its oil, then its game over in a big way because the rest of the GCC countries will follow suit. 

In reply to by We Are The Priests

Father ¢hristmas (not verified) Sep 7, 2017 12:09 AM Permalink

Told you.Bonus Lightning Round: "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."Told you that shit, too.  You wanna junk NAFTA and send Jose Cuervo back across the border?You wanna finance an Arab Spring, cut off aid, and send your Heeb in laws to negotiate?This is the price you pay.The future is cooperation.  You cannot go to war from an island.

shinobi-7 Sep 7, 2017 12:01 AM Permalink

"Washington’s reaction is bound to be nuclear!" Indeed. Behind, what cannot be qualified in any other way than, "imbeciles" in Washington, hide far more brilliant and visionary people.In this light, the occupation of Afghanistan has absolutely nothing to do with terorism and everything to do with being a thorn in such a BRIC plan. Likewise, the sudden tensions with North Korea are more a "card" being played by China and the US than actual "local" tensions. Nobody in Seoul, less than 50 km from the border is worried yet as far as I could see last week!Slowly the balance of our current world is changing. What is more and more felt as a crisis in the US is nothing but an opportunity for China where growth has been above 10% in Shanghai for over 20 years now. Confrontation is looming one way or another. When and if the dollar falls, lifestyles will follow downwards in the US. Everybody knows that. Now brace for the reaction. The transition cannot and won't be as smooth as the one between the UK and the US in the early 20th Century!.

Matteo S. shinobi-7 Sep 7, 2017 12:52 AM Permalink

There has been a huge difference between the British grand strategy at the time of Britain's splendor and the US diplomacy since the US became the dominant world power.

Britain's was rather clever, realistic, sustainable.

The US is roughly clumsy, stupid and mean. The US has been methodically destroying itself trying to mimic the grand game of victorian Britain. It has been far too visible and predictable that the US is not trustable and just tries to fuck anyone that could be a mutually profitable partner.

Almost all countries in the world now obviously has a vital interest in curbing down the US and to hasten the downfall of the US abusive hegemony and hegemonic tools : the dollar, NATO, the IMF, ... etc.

The faster it happens, the best for them all.

And the US is anyway doomed. If it pulls the trigger in a preemptive strike, it falls. If it doesn't, it will fall and become unable to pull the trigger in the future.

In reply to by shinobi-7

Yen Cross Sep 7, 2017 12:07 AM Permalink

 This shit is just getting surreal.  It's a giant fucking game of 'liars poker', and all the oligarch globalists are starting to show their cards, because they're plan isn't running on schedule.  I actually think the politicians and 5th column -[Umbrella Dudes] -are starting to "eat each-<other".  [4th column is the Fake News]  errr...ummm?

GoldHermit Sep 6, 2017 11:32 PM Permalink

I've been saying it over and over – get ready for a whole bunch of countries to start bypassing America in more ways than this. They are sick of our shit. They watch the cluster fuck in Washington and lose more respect for us every day. It's been going on for well over a decade – it's not something recent. I am looking for gold to take a much more prominent role once again.

silverer Sep 6, 2017 11:28 PM Permalink

No stopping the silk road now. The US is dropped its mask and has sent the world running away from what used to be the "shining city on the hill".