An enormous, red, white and blue elephant walked into the room of World Finance, recently; the financial and other media are bursting blood vessels with the strain of ignoring it.
International finance revolves around the World Bank and the International Monetary Fund. (There’s a Bank of International Settlements, too but we aren’t going into that here.) The U.S. and its dollar have been the lingua franca and Big Patootie in these for a long time. Just another benefit of superpowerhood. U.S. politicians have taken advantage of this financial catbird seat to the annoyance of the non-superpowers (everybody else.)
Now that America is weakening militarily as a reflection of its dwindling financial strength, Russia, China and others are moving into the resulting vacuum. They flat invaded U.S. financial territory: They announced the formation of the Asian Infrastructure Investment Bank. It is in short, competition for the U.S. in international finance where there’s been none. That’s like introducing a hot young blond as the “next movie glamour goddess” to the aging current holder of that title.
Russia, thanks to sanctions, corruption and low oil and gas prices, is a financial basket case. China is better off in some ways but cannot make it without massive international trade for its products. That is shrinking as so many of its customers are broke. For them to start competing with America in finance would be a joke … except that spendthrift America is so broke that it hasn’t been able to pay its bills without borrowing for years. It plays its part as financial superpower only with heavy stage makeup under dim lights. It may fool the voting audience a bit longer; it can’t fool its financial front row critics.
Telling is that upon announcement of this new competitor for Uncle Sam, not only Brazil and India have joined, but also Germany, France and the U.K. That’s a bit like telling the man calling an ambulance at an accident scene not to bother, but to call the coroner instead.
This is HEADLIE NEWS! You’re seeing a 120 pound weakling going up against the World Champ with the smart money leaving the Champ. With everyone pretending not to notice.
What does this mean? Hell, how would we know? We think of it as similar to a Main Street bank with a screaming mob out front, fearfully demanding its money while the bankers tiptoe out the back as fast as they can.
These sorts of things seem to move slowly for a long time, but they do move. Then they suddenly move overnight; that’s when you know that the end has arrived. This new everybody but America international finance unit set up by bankrupts will be described as a joke, right up to the day we see that the whole international financial system is the joke.