Rob’s comments below are in italics.Derek’s comments below are in normal font.
We’ve got some thoughts to share on the SCO Summit, which before this call, I was not aware of. So what is it, and what do people need to know?
Well, it's the Shanghai Cooperation Organization, an organisation which is oriented towards both defence and trade. It's another thing which has expanded enormously over the last few years.
One of the most notable things about it, which has largely been ignored in the Western media, is the enormous camaraderie between Putin, Xi and Modi from India. One of the things I found very interesting was comparing their body language, which came across to me as entirely natural and spontaneous. They were walking around grasping each other's hands, smiling, chatting, clearly totally relaxed with each other.
If you contrast that with all of the European gatherings, there's a lot of smiling and hugging and shaking hands. Even more ridiculous when you see it in movement, clearly posing for the camera, where they are shaking hands and turning to look at the camera, grinning inanely. The whole thing comes across to me as very clearly staged and formulated. They're not even terribly good actors.
Yes it's a PR exercise. Can we have some better actors please!
After all, Ronald Reagan was an actor.
Trump's got a few acting credits in his bio too...
Yeah, well, of course, he was in the reality show. He imagines he still is. But that's another story.
Anyway, the point is that there was clear enthusiasm. A major report was issued, detailing their findings on the future of global governance. It's the same theme. It keeps on recurring. It's obviously a wave of the future. It's building momentum. The theme is a multipolar world.
There was a catchphrase they had. The paper they produced was titled the Concept Paper on the Global Governance Initiative. I searched the BBC website for global governance initiative, and nothing came up.
One of the section headings was sovereign equality. This actually sums up the theme being pushed by both organisations, which is purely a trade, economic, and global finance outfit.
These two groups both have considerable overlap in their membership. Obviously, both of them have got Russia, India and China in them. Indonesia, Iran. Then there's another group of countries which are in one or the other, but not both.
The underlying themes discussed are very much along these lines. What's summed up by that phrase ‘sovereign equality’, is the idea that one nation-state has just the same rights to respect and justice as any other.
This discussion about multipolar polarity is obviously an attempt to move away from the unipolar world that the United States imagined it was living in since the collapse of the Soviet Union. Before that, we could have said we had a bipolar world.
Yet again, it was clear that any prospect of dividing Russia and China from one another is clearly fanciful. This was part of the game. Of course, in Orwell's 1984, you had the three global power blocks, which obviously were the American, the Russian and the Chinese, although they weren't actually labelled as such in the novel, and how the alliances shifted from one to another. That was what was happening all the way through the Cold War.
The more I look at it, the more it seems clear to me that when the Soviet Union dissolved and they terminated the Warsaw Pact, they imagined that it was going to really be the end of the Cold War. There was going to be open free trade and mutually beneficial relationships between all the countries in the world.
Of course, as we know, the American power centres didn't want that at all. They just wanted to decide now that they'd won the Cold War and that they were the hegemons that ruled the entire world.
Everyone else was now fully under the thumb.
People could be taken by surprise by how quickly this unfolds. Very interesting statistic I came across.
The trading transactions are increasingly being done in the native currencies of the trading partners. For example, over 54% of Chinese trade is in the Chinese currency. Over 90% of the China-Russia trade is in either renminbi or roubles. More than 75% of the Russia-Asian trade is in the national currencies of the relevant countries.
Where are these numbers from?
It might have been Jeffrey Sachs. It was certainly one of the prominent economic commentators. It could have been Richard Wolff in correspondence with somebody like Danny Haifong or Judge Nimboni Alataro.
So the dollar has already toppled from its position. The other thing to note is that the members of the BRICS consortium now account for somewhere around 50% of the world's population and somewhere around 50% of global GDP.
When you bear in mind that America is what, three or four per cent of the world's population, and the entire Western Bloc is a little under 10% of the world's population. It is plain that in these days, where we clearly have a much more universal grasp of technology and of military power, education and a rapidly rising expertise in finance and banking, the leverage that the West had over the rest of the world has already evaporated for all practical purposes.
Yeah, it's already gone.
Anyway, a couple of days after the SCO meeting in Beijing, there was an enormous military parade. This was a celebration of 80 years since the defeat of the Japanese, in which the Chinese had a large part. Obviously, the Americans think it was entirely them that defeated the Japanese, just as they believe it was entirely them that defeated the Nazis.
It's one of the forgotten theatres of war.
Yes. An interesting thing I found out is that the Second World War, or whatever label you put on it, didn't start in 1939 for China. It actually began with Japan's invasion of Manchuria in 1931. So by 1945, the Chinese had been at war for 14 years.
It suffered brutally. Many, many millions slaughtered by the Japanese. I don't think we take complete account of that. Once again, the Chinese and the Americans were allies in the war against the Japanese. Of course, as soon as the war ended, they became sworn enemies. Very similar situation with Russia.
People don't take that for granted. Another interesting aspect is that the enmity towards Russia from Britain, which the Americans inherited, is often attributed to the economic differences of opinion with the Bolsheviks in power. But it goes back way beyond that. It goes back another 100 years or so.
The British and Russians were geopolitical rivals with considerable bitterness since the 1840s onwards. Of course, they had a war in Crimea between them, which didn't work out all that well for the British.
Anyway, they have this enormous military parade showing the latest Chinese weaponry, which is obviously far more advanced than anybody in the West had ever realised. So there's a certain statement being made there.
Rather miserably and pettily, with the exception of Slovakia and Hungary, nobody from Europe or America went to join in with that parade. So once again, we're moving into a world where the powers that have been dominant for the last two or three hundred years and have imagined that this was going to continue indefinitely are finding themselves increasingly irrelevant.
Against that, it's worth commenting also that Trump seems to have an inherent contradiction in his approach to the dollar. He wants to eliminate the trade deficit by making America strong again. To do that requires a weaker dollar so that imports become more expensive and people are less inclined to buy from abroad. American exports become more attractive.
However, that is clearly incompatible with Trump's other declared intention, which is to maintain the dollar as the world reserve currency. Clearly, it's highly unattractive for the rest of the world to hold their investments in dollars and do their transactions in dollars if the value of it is evaporating before our eyes.
Needless to say, the same goes for Britain. As we noted the other day, the cost of borrowing each time that a bond issue expires and has to be replaced by a new issue has to be issued at ever-higher interest rates. This also has the effect of depressing the price of the old government bonds in the marketplace, which are paying a lower interest rate.
So it'd be very interesting to see how rapidly this unravels, but it could easily take a lot less time than people had been imagining.
There has to be a tipping point.
Of course, the other way in which the West is losing credibility is on the moral front, as more and more people. The rest of the world has been able to see what was going on in Israel for quite some time. But it looks to me as though even our own general populations are beginning to become horrified by it.
So it's difficult to see how the government are going to maintain the slavish support that they've been showing. There could well be some revelations as to what leverage Israel has over our own politicians.
Well, that's the big thing about how powerful the lobbies are.
Yeah. So interesting events this past week.
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