The Global Financial System Is On The Way To Transform - Alternative View
The Global Financial System Is On The Way To Transform - Alternative View

Video: The Global Financial System Is On The Way To Transform - Alternative View

Video: The Global Financial System Is On The Way To Transform - Alternative View
Video: Can the US dominate the global financial system forever? | Bottom Line 2023, May

Over the past few days, from various regions of the world - like a dam burst - there have been shoals of news that the existing global financial system no longer meets the interests of specific countries.

- The ruling party of Italy "League of the North" has proposed to issue national mini-bills (Buoni Ordinari del Tesoro): Italy is thinking about creating its own currency, and with its help Rome wants to reduce the national debt. The Italian government "would use them - to pay off debt obligations to companies, and citizens - to pay taxes." The implementation of such a proposal may lead to the appearance in Italy of a parallel currency (sic!) - along with the euro.

“We are evaluating all mechanisms as unilateral US sanctions prevent the use of the traditional system and payments in dollars. Therefore, we have established a payment mechanism in order to fulfill our obligations to Russia, and it will be in rubles,”said Venezuela's Vice President for Economy and Finance, Minister of Industry and National Production Tarek El Aissami.

- The head of Rosneft Igor Sechin, in his speech at the St. Petersburg International Economic Forum (SPIEF-2019), did not rule out that “in the future, payments for oil will be made in cryptocurrency”.

- Since the beginning of the year, Armenia has been paying with Gazprom Neft for oil products in rubles, said the head of the company, Alexander Dyukov, and in the future, the ruble will be used in mutual settlements with all countries of the EAEU.

- Alexander Dyukov also said that Gazprom Neft has the opportunity at any time to switch to settlements in yuan or euros for the oil sold.

- One of the leading candidates for the new head of the European Central Bank, François Villeroy, has called for "increased use of the euro in international transactions to weaken the dominant status of the dollar."

- Russia and China announced that the two countries agreed to "develop the practice of settlements in national currencies." As a result of the talks in Moscow, an intergovernmental agreement was concluded on "expanding the use of rubles and yuan" in bilateral trade.

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Note that such statements have been made - from various angles - over the past few days. The situation is ripe, as they say.

Perhaps the time has come for everyone to scatter in different directions, defending themselves by the forces of sovereign states and their own borders - in the broadest sense of these words, when the world financial system is just “on the brink”?

When information about the emergence of a trend towards "de-dollarization" spread in a wave across the world, there was also such news about a "secret meeting with the participation of high-ranking officials of the US Treasury Department and the Federal Reserve System (FRS), the main topic of which was the issue of" toxic debts " could become the source of a crisis comparable to the global financial crisis of 2008-2009”.

The financial publication TheStreet reports to the material US Officials Meet in Secret Over Junk-Loan Frenzy as Recession Alarms Flash: “The Financial Stability Oversight Board - as the group of leading American regulators responsible for preventing future financial crises - met on May 30 to discuss the significant increase in corporate borrowing over the past decade. The growth of debt-“borrowing” (credit debt) was largely due to companies with poor credit ratings. The economic downturn is likely to lead to a wave of credit rating downgrades and corporate debt defaults that could affect global financial markets.”

Following this news, the following graph of the growth of debt in the world economy (in US dollars) is published in the English press:


Today, the global debt, if we are guided by similar statistics from the Financial Times, has moved from the “heavy” weight to the “heavy” category. And how and who will cope with this overwhelming "weight of problems" now?

The Wall Street Journal estimated that at the end of 2018, the ratio of corporate debt to US GDP reached 73.1%, just slightly below the peak of 73.7% of 2009. That's over ten trillion dollars!

In this regard, "The Street" predicts: if a wave of corporate defaults begins soon, it will be extremely difficult to stop it, and the consequences will be worse than during the 2008 crisis. Mass corporate defaults are not only harbingers of massive corporate bankruptcies, but also a factor in the growth of unemployment (bankrupt enterprises cannot support employees), as well as the growing problems of pension funds and other financial structures that lend to companies with a "junk rating" in search of increased profitability.

It turns out, according to The Street, that the level of debt has reached a critical level.

For analysts, such prospects have long been, at least, understandable from the point of view of, if not specific figures and facts, then - trends. Now this opinion has been expressed at the political level - in the speech of Vladimir Putin at the St. Petersburg International Economic Forum (SPIEF-2019), assessments were made of the state of the current situation in the global economy, when every day what has already been called "rejection of the dollar overloaded with debt" is happening. And this is not a figure of speech, but a real collision for decades of accustomed to working "on the roll" of the coolest world companies.

“The US dollar, as the world reserve currency, has begun to be used by the issuing country as an instrument of pressure on the rest of the world,” Vladimir Putin emphasized, speaking at the plenary session of the St. Petersburg International Economic Forum (SPIEF). And this is no longer a purely economic, but a political assessment.

The institutions of the world financial system, created many decades ago, do not take into account the emergence of new economic centers, the increasing role of regional currencies and changes in the balance of forces and interests. And the world is beginning not only to resist this dictate, but also to look for new conditions for the existence of its finances and economies outside the "dollar consensus".

Vladimir Putin expressed his assessment of what is happening: if “after the end of the Cold War, the inclusion of new markets in the process of globalization, the architecture of the world economy has changed dramatically,” and “the dominant model of development based on the Western, so-called liberal tradition, let's call it conditionally Euro-Atlantic, has become to claim not just a global, but a universal role, "now -" the model of globalization proposed at the end of the twentieth century is less and less consistent with the rapidly emerging new economic reality. " "Profound changes require … a rethinking of the role of the dollar, which, having become the world's reserve currency, has now turned into an instrument of pressure by the issuing country on the rest of the world … Trust in the dollar is simply falling."

News about changes and new trends in world finance went too "thickly". Don’t you?

And now it is worth recalling the recent May address of Vladimir Putin to the citizens of Russia at the 10th Congress of the Federation of Independent Trade Unions of Russia. The president, as has been noted more than once, always warns in advance about what prospects may open up. So, Putin said the following - “He who has ears, let him hear”: “In today's rapidly developing world, when assets, and previous products and technologies, certain natural resources, a person, his talents, education, abilities, can be reset overnight. on the contrary, they remain a fundamental value."

You can't formulate it more clearly.

It is already clear that the dollar financial crisis is "swelling like an abscess."

And the chronicle of the last days is evidence of this.

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