Today, Russian banks announced their intention to issue credit cards using the UnionPay System after the move of Visa and Mastercard suspend operations in Russia following Moscow’s military intervention in Ukraine. UnionPay is now the world’s second largest and fastest growing credit card network. Major Russian lenders Sberbank, Alfa Bank, Rosbank, Tinkoff Bank and Credit Bank of Moscow (MKB) have confirmed that they are working immediately on rolling out UnionPay cards.

Lynnwood Times Political Analysis and BRICS Nations

As the conflict progresses, one cannot help but notice that the Russian-Ukrainian conflict is becoming more of a banking war between the Euro-centric financial institutions of the West and Russia. Also note that none of the other BRICS countries (Brazil, Russia, India, China and South Africa) participate in economic sanctions against Russia.

Russia is a member of the BRICS group of nations, a term coined by Jim O’Neill, director of economic research at Goldman Sachs, in 2001. The BRICS nations are the developing countries that are expected to be major suppliers of manufactured goods and raw materials by 2050. The original four-member group, called BRIC, held its first summit in Yekaterinburg, Russia on June 16, 2009. South Africa joined the BRICS group in 2010.

Last week, South Africa was among 16 of the 54 African nations who, like China and India, abstained from voting on a United Nations resolution condemning Russia. Many may not know that Russia was a key ally in South Africa’s ruling African National Congress’ struggle against apartheid which ended in 1991 and white minority rule which ended in 1994. .

China CIPS system is the alternative to Eurocentrism SWIFT banking system – a messaging network that financial institutions around the world use to securely transmit information for monetary transactions. Today’s announcement of Russian banks issuing millions of credit cards capable of transacting through China’s UnionPay global credit card network, the world’s second largest, further erodes Eurocentric Western control of the global central banking system.

What we might be witnessing in real time is the BRICS countries’ “excuse” to move away from the US dollar as the world’s reserve currency which came into effect in 1944 following the Bretton Woods Agreement.

In 1944, a delegation of 44 WWII Allied nations decided that world currencies would no longer be pegged to gold but instead pegged to the US dollar. Indeed, the United States had the largest gold reserves in the world, because the Allied countries only paid for their war efforts in the United States in gold.

According to the BRICS 2021 Economic Bulletin, the BRICS countries represent 41% of the world’s population, 24% of world GDP and 16% of world trade. The BRICS countries have signed a contingent reserve agreement to meet the short-term liquidity needs of their fellow countries. This financial safety net is now front and center as Eurocentric Western banks threaten the economic stability of BRICS member Russia with economic sanctions.

At the end of 2021, the BRICS countries hold a total of 5,259 tons of gold reserves against 8,133 tons in the United States according to the world gold council. However, due to the U.S. federal government’s spending spree since 2020, the national debt in the United States relative to its gross domestic product (GDP) has skyrocketed to just over 133%. For the BRICS countries, this ratio is only around 62%.

the Congressional Budget Office (CBO) predicted before the release of US President Joe Biden’s budget proposal that the 2021 deficit would be $2.3 trillion. He then revised the 2021 deficit figure to $3 trillion following the US bailout. The CBO also projected a cumulative deficit for 2022-2031 at $12.1 trillion, an average of $1.2 trillion per year.

Between 2020 and February 2022, the Money supply M1 in the United States increased fivefold, from around $4 trillion to over $20 trillion. This contributes significantly to the historic rise in inflation. M1 currency is the available currency and is used by economists to reference the amount of money in circulation in a country.

Potential economic fallout from the Russian-Ukrainian spillover

As Russian banks strive to integrate their financial systems with non-Western, non-Eurocentric alternative banking systems, other BRICS countries may follow. If that happens, BRICS countries could then re-monetize gold for trade in goods, creating a new gold standard under the Chinese yuan.

The risk that Russia and China will lead the BRICS countries to switch from the US dollar is a real threat to the United States as the Western powers’ economic war against Russia escalates. If this happens, it could lead to the end of the US dollar as the world’s reserve currency. The impact of such a geopolitical move would be devastating to the U.S. economy as it could lead to further devaluation of the U.S. dollar and rising inflation that would threaten the economic prosperity we Americans have enjoyed since World War II. .

Only time will tell what the geopolitical fallout will be when the Russian-Ukrainian conflict ends. But this is obvious, China is poised to be a benefactor in a bitter economic war between the West and Russia.