The Duran Podcast - BRICS Bridge & BRICS Clear, new financial architecture

Episode Date: October 25, 2024

BRICS Bridge & BRICS Clear, new financial architecture

All right, Alexander, let's talk about the BRICS summit in Kazan. Someone has to talk about it because the UK media and the US media, they don't want to talk about it. So I guess we'll cover this story for them. The BRIC summit in Kazan, interesting announcements from Russian President Vladimir Putin. Very, very interesting attendees. a lot of people are still coming in actually they're still arriving to Kazan to to attend the summit and and though the the talk is about not not bricks bricks is not an organization to go against

the collective west or to go to go against the usd it's an organization to go against That's the collective to go against the U.S.D. And I think the message was best symbolized by the Bricks note that was given to Putin. It wasn't real, but I think that's the message that says it all. Anyway, talk about the Brick Summit. Let's get into some of the details of what's been announced and what's going on. You're absolutely right about every point. First of all, just to say, I mean, the way in which the West has tried to ignore what's going on in Kazan.

You know, was it 36, 38 countries now? More and more of them joining in all the time. By the way, and for the record, Kazakhstan is represented. They're there. Saudi Arabia is represented. It is there. President of Bolivia has just arrived. So he's also there.

All sorts of people are there. Lots of lots of people. The UN? is there. That's the one thing that they really worked up about in the West. They're getting really worked up about the fact that Guterres, the UN Secretary General, is there, which, of course, sounds completely logical that he would be. But the way they're going out of their way to deny that this summit is really happening, properly speaking, I mean, the British media is still very reluctant to admit that this is a meeting of the Briggs states. You know, this is a Russian

organized conference which Gitteris should be ashamed of himself for attending. The fact, the way they have completely ignored the summit declaration, which has now been published, even though the work and the meetings that continue. It's just, it's just, it's just bizarre. It's just, in fact, It's even funny. I mean, I have to say this. I mean, it actually is funny. Now, I think if you really want to get to the heart of what is going on and to illustrate some of the points you have made,

they've just published the so-called Kazan Declaration, which has been agreed by the BRICS member states, but other countries that are not BRICS member states appear to be backing it. Kazakhstan, for example, being won. It's a very long declaration. It's 133 clauses long. Very interesting, very, very interesting reading.

And of course, if you read it and you look to find in it words like United States or NATO or Dollar, you won't find them there. There's a sort of scrupulous attempt to try and avoid any mention of these organisations. EU is not mentioned either. In fact, there's even some sort of cack-handed backing still being given to some of the Old Breton Woods institutions. So they're still talking, for example, about the importance of achieving equity, equitable representation in the international monetary. Fund, which is, even as they're busy creating structures, as we'll see in a moment, to completely bypass the International Bunditry Fund.

They're still talking about that. They're still talking about the World Trade Organization, you know, the importance of adhering to the rules of the World Trade Organization, even as they're busy creating their own sets of rules. The language of this declaration, extremely measured, very modest. moderate, as I said, avoids directly criticizing anybody. And then eventually, after you spend a lot of time checking and going through all of the things that are there, you gradually get to the really key, the actually important provisions.

So provision Article 65, we reiterate our commitment to, enhancing financial cooperation within BRICS. We recognize the widespread benefits of faster, low-cost, more efficient, transparent, safe and inclusive cross-border payment instruments built upon the principle of minimizing trade barriers and non-discriminatory processes, access. We welcome the use of local currencies and financial transactions between the BRICS countries and their trading partners. We encourage strengthening of corresponding banking networks within BRICS and enabling settlements in local currencies in line with BRICS cross-border payments initiative, which is voluntary and non-binding, and look forward to further discussions in this area, including the BRICS Payment Task Force.

And in fact, we're now being told by the Russian media what the name of the new messaging system, which is what this article is referring to, is going to be. It's going to be Bricks Bridge. That's going to be its name. And then if we go on to paragraph six, article 66, we acknowledge the importance of exploring the feasibility of connecting Bricks' currencies, financial markets, infrastructure. We agree to discuss and study the physical, feasibility of establishment of an independent cross-border settlement and depository infrastructure bricks clear, an initiative to complement. Let's always talk about complementing the existing financial market infrastructure.

So, no, we're not setting up a rival to Euroclear and all of those. We're actually creating a complement to EU. Euro clear. We're just going to call it Bricks clear. Again, I mean, no one should take that seriously. As well as Brick's independent insurance capacity, including Brick's reinsurance company with the participation on a voluntary basis. We task our finance ministers and central bank governors as appropriate to continue consideration of the issue of local currencies, payment instruments and platforms and report to us back, back to us by the next presidency. We recognize the BRICS contingency reserve arrangement.

That, of course, is the alternative to the IMF, being an important mechanism to forestore short-term balance of payments pressures and further strength and financial stability. Just to remind everybody, that is what the international monetary fund is supposed to do. But, you know, we're going to strengthen the amount international monetary fund as well. We express our strong support for the CRA mechanism improvement via engaging alternative eligible currencies and welcome finite finalization of the amendment. to the CRA documents. So alternative eligible currencies. Don't use the word digital currencies.

That's exactly what you're clearly referring to. We acknowledge the successful completion of the seventh CRA test run and the fifth edition of the BRICS economic bulletin under the title BRICS economies in a huge rate, higher rate environment. We acknowledge the outcomes of the first cross-border BRICS rapid information security channel, brisk drills that would further strengthen the BRICS, countries, financial sector, cyber resilience, which tells us again that this is all going to be based around digital systems.

So it's all there, but you have to drill through this very, very, very, documents see the various articles look at them clearly with you know clearly without you know letting yourself be clouded even though they don't want to tell you exactly what they're going what they're going to do so they get to set up their own messaging systems their own depositories their own reinsurance and insurance systems their own information systems, their own alternatives to the IMF in terms of providing backstops to economies. They're going to explore how to do that in the digital systems.

It's a straightforward plan to create a complete systems architecture at every level, duplicating, replicating, and in some cases going beyond that which all. already exists with SWIFT, the dollar, Euroclear and Clearview and all of those systems that we have in the West. So it's all there, it's all set out in the Kazan statement, but you have to read this document carefully to see that and they throw in, in addition, the fact that all sanctions imposed by the Western powers, except of course that they never refer to the Western powers. that all sanctions imposed by the Western powers, which have not been authorized by the UN Security Council, are illegal, actually say that. These are all illegal sanctions. And they also say that all sanctions that have not been approved by the WTO, which, of course, notice that they intend to replace, that they're illegal also tariffs as well. So it's all clearly set out if you read,

this statement properly. And it's all there. Working parties created to work on this. They've now been given formal authority from the member states. They're going to be reporting to the presidency, which is Brazil, by the way, next year. And we've got every reason to think that this is now going to move forward purposefully. And we can see that they have confirmed that they've already conducted drills on how to make some of these systems operable. All on blockchain, digital, without the sanctions, without the lecturing, the lecturing that the collective West constantly gives to the countries, without the fear of sanctions. The BRICS, and Putin made a point of this, the BRICS members, they have the population.

they have the resources, they have the oil, they have the gas, they have the grain. He talked about settling grain transactions. They have the precious metals. Why would countries choose the collective West over, I mean, the collective West doesn't offer a compelling selling point anymore. No. If this all comes about, yeah, it's a no-brainer which one you choose. Correct. If you want to get investment, if you want to deal with oil and gas and grain and food and whatever.

And I should say on investment, and this is an entirely separate part of the statement, but there are going to be specific investment mechanisms created as well in order to make possible investment flows between BRICS member states as well. There's a long section on the new development, the new BRICS bank, the new development bank that's being created, which is supposed to organise all of that. And that's given a central role in this statement. And it's all there, as you absolutely rightly say. The great advantage the West has had up to recently, up to the last five years, is that the West has been the only game in town. because the West had the architecture. It had the IMF, the World Bank, the SWIF, the dollar, all of this.

The London insurance market, Euroclear, Clearview, all of these things. People continued to use them. The moment the West started to weaponise these things, the attraction to set up the alternative became compelling. And as Putin said, just as you correctly said, as Putin says, the ability to create these alternatives now exists. So, as you rightly said, there is no competition. The only thing that would keep some countries to stick with the old system

is ideology and block discipline if they are members of the West and fear. I mean, some countries will come under an enormous amount of pressure to stick with the existing system. But that's all. And as we know, as history repeatedly shows, systems based on coercion don't have very long lives. Yeah. Swift, Euroclear. They must be kicking themselves for going along with Biden's. regime change of Russia, destroy Russia policy. That's what this is all about. In trying to destroy Russia, trying to regime change Putin, Biden was the one that was regime changed. Oddly enough,

he got regime changed. And it's the collective West that is now at risk of being, I don't want to say destroyed, but being being marginalized, isolated, marginalized. That's what we're talking about. When you say block discipline, what you're effectively saying is that the countries of the collective West are going to remain in this system because they really don't have any choice. And some other countries may not go into the new system because they're afraid of the U.S. military power. But you know, Russia and other countries in Bricks, they can also provide security and military strength, as we've seen in certain countries in Africa.

Exactly. And that's going to become, by the way, a very important thing. Because, of course, increasingly countries that are attracted to use this new system, but which remain afraid of the United States. They have seen in Ukraine that Russia is a major superpower, fully able to defend itself. They have reason to think that China can do the same. China now also has a huge fleet.

It's got aircraft carriers and all the usual things. So, I mean, if you're afraid of the United States, you also potentially have a secure partner who can protect you also. So that's something else. I mean attempting to rule through fear actually in the end not only would it not endure for very long

but it could actually scare even more people away given that they now may feel, with that will feel that there is an alternative safeguard available to them as well. What the collective West is now paying is the price of the neocons capture of Western foreign policy.

The neocons have led the West into a complete disaster. I mean, if you take your mind back to the early 1990s, the West had everything, that all of these structures in place, of course there were rising powers. Of course, China, India, ultimately Russia, would have come back. Brazil maybe too in time. The geography would have changed. But as you absolutely rightly said in a recent program that we did, there would have been no particular compelling need for these rising powers to go about setting their own alternative systems,

given that the Western system was there to use. The problem was that instead of keeping that Western system, protecting that Western financial and global system, the West tried to weaponise it instead, try to weaponise it in order to achieve geopolitical goals, which it proved unable to achieve and which have backfired on it. Yeah. So can you talk about what's at risk for the collective West and the United States

going forward in the next 10, 20 years? Because at the end of the day, this is about the U.S. dollar, the U.S. reserve currency. I mean, it powers the entire collective West. But, you know, with the U.S. dollar, though, the way the same thing is, system is set up, it's not only organizations like NATO or Swift or the World Bank that are at risk from this rising new system. It's the NGOs. It's the universities. It's all of these groups that are funded by this architecture that the West has. The think tanks. So I mean, I think

we're going to see a big freak out over the next 10 years because all of this is at risk. We're talking about millions of, of jobs, hundreds of thousands of organizations all over, all over the world, not only military bases. Every country has their, their U.S. funded, state department funded, NGOs and university and human rights groups. And I mean, this is a big system that once this new architecture gains momentum, and it has all the momentum. And all the momentum is behind bricks. There's no doubt about it. You can't, argue that. The old systems is just going to start collapsing. And we're talking about a lot of organizations and institutions and people who are going to be at risk. Well, this is exactly

right because what this is going to do is that it is going to shift world trade. World trade for hundreds of years, basically since the creation of the Atlantic. system in the 16th century has been focused on the Atlantic. I mean this has been on the Atlantic coastlines the European Atlantic coast, the North American Atlantic coast

and that's where the centre of global economic power has been. What this is going to do as it develops is going to shift world trade to other places away from the Atlantic

And where trade goes, finance goes. Where finance and trade go, economic activity happens. Where economic activity happens, science and technology follow. That is what history shows. I'm sure if we speak to Jeffrey Sachs, in fact, we will soon speak to Jeffrey Sachs. He will confirm all of this. So what we risk over time, in the West, unless we wake up to the seriousness of this

and start fundamentally rethinking our whole approach is that we risk becoming economically marginal, just as the Pacific region became economically marginalised in the early 19th century, when it then experienced a prolonged period of economic stagnation and impoverishment. So this is what we need to wake up and start addressing and thinking about. And in the meantime, as these processes start to play out, you're going to see exactly the pattern

that you describe. All of these institutions that feed off the finance and trade flows that the West has thrived on for, you know, all of these previous, all this previous period are going to gradually atrophy and die because they're going to be, they're going to find the finance flows are starting to go elsewhere. So the dollar will cease to have the attraction that it did in all sorts of places. We will see stagnation. we will start to see cultural stagnation probably begin to happen as well. We're already seeing some symptoms.

Absolutely. We're already seeing it. So again, the parallel, if you want to, if you want a specific parallel in terms of relatively modern, Western or European history, a good one would be to look at what happened to Spain after it lost. pre-eminence, economic preeminence in the mid-17th century. It gradually atrophied, it stagnated, it began to be left increasingly behind, even as the rest of Northern Europe, the United States and all of those places developed. And by the late 19th century, and early 20th century, Spain had become a poor country, racked by civil wars and all kinds of

problems economically insignificant, as distance from the great superpower it had once been as it is possible to imagine. And that is a possible future for us in the West unless we wake up and start adjusting and understanding what is going on. And yes, the United States, because it is inherently rich and because it is a kind of global large island protected with seas and has great natural resources and in theory is in a better position to navigate these problems than the European countries are but even the United States will be badly affected by these processes and at a time, of course, when there's lots of concern

about whether it's political stability is as great as it once was. So, you know, this is something people need to think about, and you're right to say that there's going to be a collective freak out about it and there will be. But the question then becomes, what are we going to do?

Are we going to just go on freaking out and railing about the system and talking about the alliance of all, that is besieging us and talk about, you know, our values and the fact that all our values are under threat and retreat into ourselves, if you like. Or are we going to fundamentally rethink our policies and our ideas and the kind of way in which we conduct things and relate to the rest of the world? if we do the second, then we have a chance.

We are not being excluded from this system. All of the Rick states are going out of their way to make that point. The Russians, in particular, by the way, are going out of their way to make that point. They're probably doing it with some, you know, an element of tongue-in-cheek, because as you rightly said, previously, they're said, up all these alternatives to the Western system and they're doing it quite purposefully, even while they pretend that they're not. But, you know, we could take them at their word, say to them, well, look, we've considered what we've done. We went on this disastrous, you know,

frolic around the world, trying to maintain a geopolitical hegemony, which has now passed. We've understood that this is a road to nowhere. We've got still a huge amount to offer. Let's engage. If we do that, we will be all right. If we don't, as I said, we will end up like late 18th, early 19th century, Spain in steady decline and decline into irrelevance and eventually to chaos. a civil war.

Well, I mean, my observation, my observation and my final question to you is that the big loser in all of this is the EU. I mean, the EU has nothing to offer in all of this, zero. Europe can make it out of this if the EU dissolves and each country can then take a sovereign decision as to how they want to approach this emerging multipolar world. inside the EU they won't be able to do it. But if they have the ability to make these decisions on their own, then maybe you're going to see some countries shift towards this new reality,

Hungary, Slovakia. Those are two examples. Maybe even a country like Italy could be a possible example of a big economy, perhaps considering the multipolar world. But inside the EU there, all the member states are held. And the EU has nothing to offer. The new system, it really doesn't have anything to offer. The old system either, except it's vassalage.

I mean, it's just a vassal at this point. And it doesn't really have the resources or anything to offer bricks and the bricks countries as an entity, as an organization. The EU. The U.S. is different. I think you're right. the U.S. does it just focus within? Is that the way that it can it can remain a power is just to focus purely on the United States and the region? Or is there a possibility for the U.S. under the right leadership to say, you know, we absolutely are going to focus on the U.S.

That's a good policy. That's the correct path forward. But we also have to figure out a way to engage with bricks. It doesn't mean we're a member. It doesn't mean we apply to enter bricks or anything like that. But we find a way to engage with bricks somehow and to be part of this new reality. I also want to say when it comes to Russia, they're going to punish the EU and a lot of European countries a lot harder than the United States. That's my sense of things. For example,

the very, very big loser in all of this is going to be Germany, France, Netherlands. I think these countries, the Poland, the Baltics, these countries that went really hard against Russia, Romania, I think they're going to be the ultimate big losers in all of this. And other countries that went a little lighter in Europe, maybe they'll find a way back into the, or find a way to the new system. But the United States, I believe, will be able to find a way if it wants to, to approach Bricks and Russia ultimately. It is a much better position than the EU, because it's so much bigger. It still possesses a level of political vitality and a political energy that nowhere in the

you will you find? I mean, I was listening to a debate, for example, just before we started this program, but in all sorts of people in Washington arranged by responsible statecraft, people for, you know, the Council for Foreign Relations, people like that, talking about the situation in Ukraine. I didn't fully agree with anybody there, but nonetheless, they were able to talk about this issue in a kind of realistic way, saying things which it would be impossible to say in any major European country at the present time and be considered respectable. Just say, so the United States has the resources and the size and the history and the political structures and the economic structures, which provided with the space and the time in order to

adjust to this. And if I have to say what I think, I think eventually it will. I think that there continues to be a kind of rugged pragmatism within the United States, the larger American population, the business community, people like, you know, all the various companies that we think of. They have that sort of tough-minded ability to see through these things. So I think they will. But of course, all of this very much does depend on them wanting to do it. It's exactly what you said. If they continue to do what they've been doing up to now, which is what the Spanish did, by the way, which is the Spanish always used to say, because there's lots of talk in Spain about reform, about change, about opening up Spain, about thinking about how to approach the rest of the world. And whenever that happened, a coalition of people always used to come together, people who were stakeholders in the existing system, and they would say this is a betrayal of the idea of Spain.

And all reform processes were stopped. If the United States can avoid that, and it was a much more dynamic society than 17th century Spain was, if it can avoid that, then I agree. I think it will come through. It won't be the hegan on that it has been over the last 50 years. But then what did the American people in the great majority, what benefit did they derive from that? Some people, some people, some oligarchs within the system derived a lot of benefits from it. The wider American people did not. So the United States does have a lot of manoeuvre space. The Europeans are completely different. You're absolutely correct. They've created this prison for themselves, which is the EU, which has a built-in structural incentive to keep things as they are. And in fact, if anything, to tighten the, to strengthen the bars of the prison. As I said, it is constantly now interfering the internal affairs of the EU states,

the EU member states, to make sure that the correct outcomes are always achieved. It's now interfering at every level in EU domestic policies, economic policies, social policies, doing things which would make it impossible for EU member states or for Europe generally to connect with the rest of the world. So I think that if things stay as they are, there's a real possibility that what we'll start to see is that some states will begin to peel away. Hungary maybe. Slovakia maybe, other countries in Eastern Europe.

Obviously there are intense divisions in some of these countries, but conceivably they could start to peel away. If the EU core remains solid, which it has up to now, you know, the old, the old original EU countries, France, Germany, Spain, well, Spain came in later, Italy, all of those. if they remain together in the same way as we see now, if the Baltic States and the Scandinavians remain part of that, the Benelux countries, Netherlands, Belgium, Luxembourg, then what we will have eventually in 50 years' time is Europe, the Great Museum,

with its beautiful cities, its splendid architecture, it's extraordinary museums, some good, remaining opera houses and places like that. The tourists from Shanghai and wherever, Singapore and Kuala Lumpur, where we've just been, will come to admire all of these things. And they'll be very indulgent to the locals who will have all sorts of strange habits, which many of these people in the East Asian countries will find quaint and strange and difficult. to understand, but which they will probably indulge.

And that's what we will be. We will be a tourist museum, which outsiders will come to admire. With the living standards, the living standards, and the low economic activity and the low cultural activity that is connected with all of that. Our culture, in effect, will be for sale. Yeah, I agree. You know, some countries are already there, Alexander. Some countries in the EU are already there. Yeah. All right. We will end the video there. The durand. Dot locals.com. We are on a rumble, odysse, bitch, shoot, telegram,

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