Is Germany Moving SWIFT-ly To CIPS?
Is Germany Moving SWIFT-ly To CIPS? by Rory The Daily Coin
We have detailed how Russia and China have developed independent global payment systems that run parallel to the dollar based SWIFT system. We recently discussed how sanctions against Russia were actually “crushing the American empire“. The dollar based system is now obsolete and the entire world is questioning why the current system is the only way to conduct global trade. Well, it’s not.
The Federal Reserve Note (FRN), U.S. dollar is under attack in a variety of ways. We have been documenting the astronomical growth of the yuan backed futures oil contract and how this is going to impact the FRN and the American economy. We have also pointed out that Russia has dumped approximately 82% of their entire U.S. treasuries and Turkey recently announced they will be offloading approximately 50% of their treasury holdings.
At the most recent BRICS Summit, held in July, one of biggest take-aways was the fact the BRICS alliance was in talks with Turkey and the possibility of Turkey, which is a NATO “partner”, could join BRICS! This is to say nothing of China, which heads the BRICS alliance, is also in talks with Argentina and Venezuela.
Now we learn that Germany is on board with moving away from SWIFT and the “trade wars”, sanctions against Russia and President Trump forcing NATO “partners” to pay up. President Trump’s actions have pushed Germany away from their alliance with the U.S.. The German / Russian partnership is very important to the overall German economy and Trump’s recent demand that Germany stop doing oil business with Russia seems to have pushed them over the edge. There may be more at play here, but most all geopolitical issues in the 21st century boil down to oil, oil production and how to get the cheapest oil possible. Whatever the motivation, Germany wants out of SWIFT as they have come to realize how strangling this payment system is to any and all economies utilizing this platform.
In a stunning vote of “no confidence” in the US monopoly over global payment infrastructure, Germany’s foreign minister Heiko Maas called for the creation of a new payments system independent of the US that would allow Brussels to be independent in its financial operations from Washington and as a means of rescuing the nuclear deal between Iran and the west.
Writing in the German daily Handelsblatt, Maas said “Europe should not allow the US to act over our heads and at our expense. For that reason it’s essential that we strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent Swift system,” he wrote, cited by the FT.
Maas said it was vital for Europe to stick with the Iran deal. “Every day the agreement continues to exist is better than the highly explosive crisis that otherwise threatens the Middle East,” he said, with the unspoken message was even clearer: Europe no longer wants to be a vassal state to US monopoly over global payments, and will now aggressively pursue its own “Swift” network that is not subservient to Washington’s every whim.
Swift is also affected: unless it wins an exemption from sanctions, it will be required by the US to cut off targeted Iranian banks from its network by early November or face possible countermeasures against both its board members and the financial institutions that employ them. These could include asset freezes and US travel bans for the individuals, and restrictions on banks’ ability to do business in the US.
Maas’s stark warning against US domination of global payments comes with relations between Germany and the US in their worst state for decades. Mr Trump has chastised Berlin over its large trade surplus, its relatively low military spending and its support for Nord Stream 2, a new gas pipeline that will bring Russian gas directly to Germany.
Meanwhile, Berlin has looked on in dismay as Mr Trump has withdrawn the US from the Iran deal and the Paris climate treaty, imposed import tariffs on EU steel and aluminium and appeared to question America’s commitment to Nato.
In short: Europe has finally had enough and it plans on hitting back at Trump where it truly hurts: the money. Source
I have to believe that Germany knows and understands that both China and Russia have alternative payment systems in place. I have to believe that Germany actually reads news that discusses situations like CIPS and the Russian payment system, SCO, BRI and all the other Eastern alliances that are redeveloping the global economy. Why would Germany need to re-reinvent the wheel when there are two perfectly good alternatives in place and ready for business?
All of these discussions, policy changes and actions all point to one thing – de-dollarization. It’s a slow walk, we believe another 7-10 years, mid / late 2020’s will be the timeframe this whole picture is realized and the FRN no longer carries any weight at all on the global stage.