22 December 2015

Economies escaping America's chains

The Blog


The IMF changed its rules on lending to allow lending to countries in arrears. This made it legal for the IMF, now part of the "New Cold War", to financially prop up the US-backed regime in Ukraine as a reward for its anti-Russian hatred and extremism.


Although this change has indeed annoyed the Russians as intended, they have pointed out that the International Monetary Fund will undermine itself in the long term by doing this, with top government figures making the following points.


  • Russian Foreign Minister Lavrov: IMF now faces a "timebomb" due to recklessly changing its rules to allow lending to countries with arrears, in order to prop up the Ukrainian regime
  • Russian Prime Minister Medvedev: after IMF rule-change, "there will be a lot of pleas from different borrower states to the IMF to grant them the same terms as Ukraine. How will the IMF possibly refuse them?"

Both quotes were used by Michael Hudson in a realist analysis of the US's and NATO's "New Cold War" against Russia and the SCO (Shanghai Cooperation Organization), penned for Counterpunch on 18 December. Ukraine will never be able to pay off its debts, nor will the West be able to extract resources there, because they wage war against Ukraine's economic heartlands in the Donbass region, Hudson stated.

Hudson also presented the following evidence that the US-led world order is weakening, and many national economies are now able to rebel and escape the US regime's chains of debt, austerity and torture.


  • "The Asian Infrastructure Investment Bank (AIIB) threatens to replace the IMF and World Bank"
  • China and Russia "Moving to denominate their trade and investment in their own currencies instead of dollars"
  • When US threatened cut Russia from SWIFT system, "China accelerated its creation of the alternative China International Payments System (CIPS), with its own credit card system to protect Eurasian economies"
  • "Instead of dismantling public spending, the AIIB and a broader Eurasian economic union would do what the United States itself practices, and seek self-sufficiency in basic needs such as food, technology, banking, credit creation and monetary policy."
  • China and Russia "create the Shanghai Cooperation Organization as an alternative to NATO, and the AIIB as an alternative to the IMF and World Bank tandem"
  • Richard Koo: “If the IMF’s rival is heavily under China’s influence, countries receiving its support will rebuild their economies under what is effectively Chinese guidance, increasing the likelihood they will fall directly or indirectly under that country’s influence.”
  • "new basic guideline for IMF lending – is to create a new Iron Curtain splitting the world into pro-U.S. economies going neoliberal, and all other economies"
  • "President Putin patiently refrained" from demanding immediate repayment of loans from Ukraine; "He is playing the long game"
  • "The broad drive against Russia, China and their prospective Eurasian allies has deteriorated into tactics without a realistic understanding of how they [the US regime] are bringing about precisely the kind of world they are seeking to prevent – a multilateral world."
  • "Standing above the rule of law and national interests, American neocons proclaim that their nation’s destiny is to wage war to prevent foreign secular democracy from acting in ways other than submission to U.S. diplomacy."
  • "U.S. geostrategists seem to have imagined that if they exclude Russia, China and other SCO and Eurasian countries from the U.S.-based financial and trade system, these countries will find themselves in the same economic box as Cuba, Iran and other countries have been isolated by sanctions."
  • "The more [the US supports its terrorists and its neo-Nazi pawns in the Middle East and Europe respectively] the greater the catalytic pressure is growing for the [SCO] to break free of the post-1945 Bretton Woods system"

All of this evidence shows the US military and economic supremacy established at the end of the Second World War is under threat. The progress already made by Russia and China presently is more decisive than anything they achieved during the 'original' Cold War. In particular, the SCO is potentially the most powerful alliance ever conceived, uniting the whole of Eurasia in a single economic and military bloc that was never achieved by the Soviet Union and its allies.

As the United States has lost credibility with many poor countries and is perceived now as an aggressor, the appeal of Russian military support and Chinese financial support grows in developing countries.


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