The world needs an international reserve currency that is disconnected from individual nations and able to remain stable in the long run, removing the inherent deficiencies caused by using credit-based national currencies.
— PBOC Governor Zhou Xiaochuan, October 9, 2009.
Only Xi can rescue Trump from his self-created tariff blunder, but his price will shock the West.
The Story So Far
President Trump’s tariffs will barely affect China’s GDP growth but, says Molson Hart, by April 10 America will face an economic catastrophe worse than the global financial crisis (GFC), as hospitals close and the bond market triggers hyperinflation.
As my subscribers know, China began preparing for this moment in 2009, when the PBOC1 started developing mBridge, the international trading platform on which countries trade in their own currencies quickly and securely. mBridge has been operating smoothly since 2022.
Next came CIPS, China’s alternative to SWIFT’s slow, expensive, insecure, dollar-denominated system. CIPS daily transaction volume surpassed SWIFT’s last week.
But by far its most ambitious project was an international reserve currency modeled on Keynes’ bancor2 system, which makes surplus countries invest their excess foreign reserves abroad and deficit countries reduce their foreign borrowings accordingly. Keynes proposed the bancor at Bretton Woods in 1945 when, after centuries as the world’s reserve currency, the pound sterling could no longer afford to serve both domestic and global needs. The United States rejected it, insisting that the dollar replace the pound. President Trump recently admitted that the United States is fast approaching that moment.
The PBOC aimed to introduce the bancor in the late 2030s but will bring that forward , to save the US dollar from collapse. It will also support America as it adapts to the new regime. Then, freed of international obligations, the RMB, the USD and the Euro can focus on domestic priorities.
The rescue
PM Li Qiang, who has known him since their Shanghai days, will invite Elon Musk and Federal Reserve Chairman Jerome Powell to convey the bancor offer to the White House and even allow Trump to claim credit for it. Implementation will require years of patience, trust and skill, but Trump has no alternative. War is definitely not one: the US was never a match for China militarily, as Beijing demonstrated in 1951. Nor is a trade war: China’s GDP will be unaffected by tariffs and grow 5.4%, by $1.7 trillion, this year while America’s is already contracting.
Xi the Merciful
Moral leaders whose own states always act correctly will unfailingly attain primacy. States wishing to exercise humane authority must be the first to respect the norms they advocate, because leaders of high ethical reputation and great administrative ability are attractive to other states and, since the domestic determines the international, winning hearts and minds is more important than winning territory. Being compassionate in great matters and overlooking small ones makes one fit to become lord of the covenants. Rulers win leadership by acting morally and, by presiding over the meetings of other states, earn international acknowledgement of their humane authority.
— Xunzi, 300 BC.
Beijing is hunting much bigger game than tariffs: the liberation of Palestine. China, Palestine’s oldest and most loyal friend, has endured America’s genocidal mania for generations and now has the tools to end their shared misery.
Every major US industry, from arms to hi-tech to automotive, relies entirely on Chinese rare earth metals and lacks the skills to manufacture them. Beijing restricts REM exports and forbids foreign buyers, like Occupied Korea, to on-sell them to the West. If the US wants them, it must end the genocide before the last of its REM stockpiles is exhausted: eight months at most. The clock is running down.
This year, we will witness the most momentous events since WWII. Global leadership will return to Asia, America will enters its post-imperial twilight, and Palestine will become free and independent, and the Zionists return to Ukraine whence they came.
Appropriately, Xi is in Moscow today…to celebrate Victory Day.
They’ve won.
ENDNOTES:
The post Xi the Merciful? first appeared on Dissident Voice.
This content originally appeared on Dissident Voice and was authored by Godfree Roberts.