Monday, October 19, 2009

Latin America, Russia, China, Iran and others prepare to dump dollar

Amazing news all over the Internet: Latin America is about to dump the dollar, and so are Iran and Russia, and even China and some Gulf Arab states (also read Robert Fisk's commentary about all this here).

Remember when Saddam did the same thing? He got himself invaded ASAP.

There are clear signs that the regime in Washington is preparing to fight in a few more regions of the world: Iran is surrounded by Imperial forces, Colombia has not become a de-facto staging post for Imperial strikes in Latin America, and the new AFRICOM paves the way for military interventions in Africa. Looks bad, for sure, but these are mostly hollow threats.

Israel in the USA will probably strike at Iran, but they will achieve little, if anything, with such an attack. In Latin America the best the Empire can do is assassinate Chavez and/or Morales, but that is unlikely to reverse the trends in the continent. In fact, such an assassination could backfire rather powerfully. Looks like even the overthrow of Zelaya in Honduras is, at best, a 50/50 right now and it might actually collapse with time.

Russia and China are both absolutely beyond Imperial reach by now. Russia, in particular, is extremely stable and solidly anti-Imperial in its polices and pro-American political forces have basically disappeared from the political map. I am not so sure about China, but I see no reasons to doubt the basic stability and power of the Chinese polity.

My sense therefore is that the USraelian Empire just does not have the means to prevent a gradual dumping of the Greenback by most of the economic key players out there. The main obstacle which everybody faces in dumping the dollar is, of course, the huge foreign exchange reserves most of these countries hold in dollars. A rapid devaluation of the dollar would have a very bad effect on such countries are China or Saudi Arabia. Others, such as Russia, Iran and Latin America will probably do much better.

Russia, in particular, was sanctioned for its victory against the Imperial proxy Georgia in 2008 by a large disinvestment campaign by the Western financial elites. Well, maybe that disinvestment will end up helping Russia in the long term.

Whatever the modalities of this will be, it appears rather clear that from now on the Greenback's future can only be one thing: a slow-motion crash.

The Saker