Another Death Nail For The Dollar – UK Joins Financial Partnership With China
from The Economic Policy Journal The UK has just agreed to join China in a new financial organization that must certainly have high level US government financial plotters furious. This is a watershed moment. To be sure, this is all being done at a high bankster level and has little to do with financial freedom for the peoples of the US, UK or China, but it is both a stunning and fascinating move by the UK. FT reports:
The Obama administration accused the UK of a “constant accommodation” of China after Britain decided to join a new China-led financial institution that could rival the World Bank. The rare rebuke of one of the US’s closest allies came as Britain prepared to announce that it will become a founding member of the $50bn Asian Infrastructure Investment Bank, making it the first country in the G7 group of leading economies to join an institution launched by China last October. Thursday’s reprimand was a rare breach in the “special relationship” that has been a backbone of western policy for decades. It also underlined US concerns over China’s efforts to establish a new generation of international development banks that could challenge Washington-based global institutions. The US has been lobbying other allies not to join the AIIB… A senior US administration official told the Financial Times that the British decision was taken after “virtually no consultation with the US” and at a time when the G7 had been discussing how to approach the new bank. “We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power,” the US official said.
The significance of this agreement goes far beyond the deal itself. This is a signal to the global financial community that the UK has now confirmed that the US is no longer the only big kid on the block. There may be no immediate financial repercussions, but the long-term significance is that nations in considering financial deals in the future have options beyond the US. This can play out in hundreds of different ways over time, but one result will certainly be more respectful consideration of China’s yuan as an important currency and perhaps as an alternative reserve currency to some degree to the dollar.