Biden loses Mexico, Dollar and the World: notes on the changing global order

International journalist
April 18, 2023

Get ready for war in 2025! – that’s what a top U.S General said in a memo to his troops. Gen. Mike Minhan, a Four-star Air Force general, sent a memo to the officers he commands that predicts the U.S. will be at war with China in two years and tells them to get ready to prep by firing “a clip” at a target, and “aim for the head”.

One may ask, why would Washington prepare itself for a direct war with Beijing?

This question may be answered according to analysis, that the U.S hegemony is declining and the need to go to war may be the only solution, if economic and political propositions don’t work. The most important pillar of America’s dominance is the U.S Dollar, which after the Second World War became the backbone of the global economy for decades.

In the 1944, the Bretton Woods agreement established the US Dollar as the world’s reserve currency. 44 countries agreed to a global monetary system that would be underpinned by the US Dollar, which in turn was backed by gold. That system cracked in 1971, for multiple reasons, the most important of which was the war in Vietnam and President Nixon as a result ended the convertibility of US Dollars to Gold.

Immediately, Oil was connected to Dollars in which a term was invented “Pertodollar” in the seventies. The arrangement meant any country buying oil, from Somalia and Ethiopia to Europe, India, Sri Lanka, Pakistan and China, all needed U.S. dollars. This ensured the dominance of U.S. dollars in the global financial system.

Hence, we can relatively say that oil is the new gold for the American currency, any minor or major shock to the black gold currency payment, would damage Uncle Sam’s economy and therefore reduce its influence on world politics.

So, let’s say if Saudi Arabia decides not to go fully out of petrodollar, but to make a diversification, for example 75% in USD and 25% in Yuan, that would straight away affect the global economy, and very negatively the American one. And that’s not a dream! that could be the reality in few years as mentioned in the Wall Street Journal “there are talks between Riyadh and Beijing to consider accepting Yuan instead of Dollars for Chinese oil sales and have accelerated as the Saudi unhappiness grows with Washington.”

A few months earlier, the US authorities (including President Biden) had vowed to punish the Saudi esteblishment for cutting oil production in defiance of the US instructions.

China and KSA Visits

While addressing the Gulf Cooperation Council (GCC) leaders during his December visit to Saudi Arabia, lXi Jinping urged the Gulf monarchs to “make full use of the Shanghai Petroleum and Gas Exchange to conduct oil and gas sales using Chinese currency.”

Earlier this week, China and Saudi Arabia signed major oil deals. One will see state-owned oil giant Saudi Aramco take a $3.6 billion stake in Rongsheng Petrochemical Co. Ltd. to increase its presence in China. Also, the two countries agreed to construct an integrated refinery and petrochemical complex in northeast China.

Jason Tuvey, Deputy Chief Emerging Markets Economist at Capital Economics said “Saudi Arabia appears to be turning towards Beijing and away from the West,”. “That has fueled talk of Saudi accepting Renminbi for its sales of oil to China; the so-called ‘Petro-yuan’.”

“Amid great power competition with Russia and China, the United States recognizes that Saudi has other options. And a further pivot of Saudi to the East must be prevented at all costs” said Andreas Krieg, professor at King’s College in London.

That’s what threatens the US officials, as they are witnessing that the world is shifting and any switch in oil payment will bring down the American empire. Can they use their favorite weapon against their strategic ally in the middle east?  

The economic sanctions aren’t an option, but anyways they’re not working anymore as effective as they thought it would be, and the most recent example is Russia.

So, senators in the USA began talking about filing a report about human rights violation in KSA under the section 502B of the Foreign Assistance Act. Once the report has been received, Congress has the option to trigger a vote on ending the sale of U.S. weapons to Riyadh.

This could lead to an even closer ties between Beijing and Riyadh, including military cooperation, but that’s not possible in the meantime.

Senator Murphy questioned the wisdom of dealing with Riyadh as usual, especially under the guise of promoting Saudi normalization with Israel. “If we’re going into a relationship with the Saudis where we’re doing more significant arms sales, it has to be in return for better behavior toward the United States, not just better behavior toward Israel,” he told the New York Times.

This matter will probably in the future raise the military confrontation, not with Riyadh, but directly with Beijing as General Minhan said: “aim for the head”.

Recent treaties outside of US Dollar

In addition, to multiple treaties between countries ditching the US dollar as an intermediary. China and Brazil, the two members of BRICS, reached a deal to trade in their own currencies.

Players outside of BRICS are also going that way, like France that completed their first Yuan-settled LNG trade with China.

The ASEAN (Association of Southeast Asian Nations) also considers dropping the US Dollar, Euro, Yen, and British Pound for local currency financial settlements.

This is economics. Let’s talk politics

 In other areas of cooperation, Saudi Arabia approved the decision to join a China-led Shanghai Cooperation Organization (SCO) as a dialogue partner. The SCO is a political, security and trade alliance created in 2001 to counter western influence. Its members include China, Russia, India, Pakistan and four central Asian countries.

Over a dozen countries have expressed interest in becoming members of the BRICS. This year, the bloc plans to determine whether to admit new members and what entry criteria to establish. Saudi Arabia and Iran are among those who formally asked to join.

Let’s not forget, the historic move from China who brokered a peace deal between Saudi Arabia and Iran, bringing peace to the middle east for the first time in years. Leaving Washington in shock, this could really impact positively on future BRICS agreements.

The ex-Goldman chief economist, who coined the group’s name, is now calling on BRICS to expand to create a fairer, multi-currency global system by including emerging nations such as Mexico, Turkey, Egypt, Indonesia, Bangladesh, Vietnam, Pakistan and the Philippines.

Who should be accepted?

Mexico, the neighbor of USA who got exploited for years and got their lands stolen from them like California, Nevada, Kansas all the way to Wyoming in 1840’s, announced its intent to join BRICS.

Probably, Mexico should be part of the group, because it sees the BRICS as an alternative platform to diversify its foreign relations and increase its global influence. Mexico is the second-largest economy in Latin America after Brazil and has a population of more than 120 million people. It also has a strong manufacturing sector that competes with China in some markets. Mexico has already established close ties with China, which is its second-largest trading partner after the US. They also participated in several BRICS summits as an observer and guest.

Mexico is actively developing a mega-project called the Interoceanic Corridor of the Isthmus of Tehuantepec. This will include two sea ports, a network of railroads, and 10 industrial parks which will attract corporations who want to invest in Mexico and North America generally. It will be a much more appealing trade route than the Panama Canal. It is set to reduce the amount of time to transport cargo from the Pacific to the Atlantic from 10 days with the current capacity of the Panama Canal to just 10 hours.

Mexico will be problematic for geopolitical reasons i.e. U.S. The countries share a 2,000-mile border with 47 active land ports of entry.

USA vs Mexico?

Not to mention, that the Mexican president publicly argued that the US should respond to allegations that it sabotaged the Nord Stream pipelines. “If we are talking about acts of violence, how is it that an award-winning journalist in the United States claims that the US government sabotaged the gas pipeline from Russia to Europe?” Lopez Obrador asked during a press conference on Tuesday.

The Mexican leader went on to declare that “lying” and “politicking” is in Washington’s nature, and asserted that the US “does not want to change, so they believe they are the government of the world, and they only see the speck in someone else’s eye and not the beam in their own.”

It looks like Mexico is done with the American policy, and is ready to move economically and politically towards the BRICS.

These actions were breaking news for the United States and raised awareness as plans for regime change began. US Congressman Lindsey Graham introduced legislation to invade Mexico with US military forces under false claims of “fighting drug cartels”, something that reminds us of “Iraqi weapons of mass destruction”.

It appears that, Biden administration has lost its economic and military unipolar hegemony which it has enjoyed since 1991.

First by, encouraging NATO to move east towards Moscow and then motivating the Ukrainian regime to attack and fight Russia, for the sake of the master in the white house, leading to an awful proxy war, which by the way the NATO is losing it day by day.

Secondly, the US government has run an anti-China propaganda, to inject in the minds of Americans that China is the bad guy here. Only because Beijing was rising as a major world power and nothing frightens the Yankees than a state that’s not a puppet in their hands. As a result, Washington will do its best to drive China to the point of military action in Taiwan.

Moreover, Biden made an irreversible error by ending the support for Saudis in Yemen, which led after that to many attacks on Saudi Aramco. All the energy policies in KSA were in favor of the USA, in exchange for the US military protection and weapons. President Joe Biden forgot about that, and in 2019 he publicly accused Crown Prince Mohammad Bin Salman for the murder of Jamal Khashoggi, only to fight Trump for presidency. Saudi officials have also added that they were shocked by the precipitous U.S. withdrawal from Afghanistan two years ago.

These actions made by President Biden regime backfired against them, making Russia and China closer than ever as we have seen that the Chinese leader Xi Jinping signed 14 different documents in Moscow with the Russian president Vladimir Putin in trade and currency etc.,

Saudi Arabia dealt a three-dimensional strike to the Democratic president:

1-Signing economic deals with China.

2-Welcoming Russian navy warships equipped with Zircon hypersonic cruise missiles to dock in the Red sea for the first time in around a decade

3-And on top of all that, closing a peace deal with its long-time rival Iran (bearing in mind that all the American talk was about the conflict between the two and that they are the protector of the kingdom against the Persians)

What makes it even worse, Biden allies in Europe, facing economic and social resentment, inflation rates skyrocketing and banking crisis inside of America is deepening. The Fed’s target of bringing inflation to 2% could see dramatic change in tumultuous aftermath of Silicon Valley Bank collapse. The percentage of global reserves in U.S. Dollars is down from 72% in 1999 to 59% now according to IMF.

Former Assistant Secretary for Public Affairs for the U.S. Department of the Treasury Monica Crowley has warned of “catastrophic” consequences if the U.S. dollar loses its status as the world’s reserve currency. “That would mean the end of the U.S. dollar,” she said, predicting that “there would be a complete implosion of the global economic system”.

Washington’s only response may be to distribute the losses among all. For example, we may see the American war machine (which should not be underestimated concerning its economic importance to the American interior) ready for provocations in Northern Europe, the Far East and South Caucasus.

North of Europe:

Finland joining the NATO could mean a serious security threat to both of Helsinki and Moscow, because NATO’S borders with Russia doubles which means higher percent of escalation in nuclear war.

Russia will stay the dominant power in the Arctic and Finland won’t have access to resources from that area anymore. It is expected that in 2030, the arctic zone will be one of the most important strategic points on the planet.

Far East:

Biden is afraid that in 2024, Trump will be elected and all the crimes of the Biden family will be exposed especially in Ukraine where they established biological and chemical weapons base. That’s why all the moves of POTUS are aimed to escalate war in another area of the world and this time it will be in the far east.

Pacifist Japan unveils biggest military build-up since World War Two, with a $320 billion plan that will buy missiles capable of striking China and ready it for sustained conflict. All of this comes after the assassination of the former Japanese prime minister Shinzo Abe who was against any changing in the constitution which prohibits an army and renounces war.

China will not stand by idly in front of those threats from Japan and Taiwan.

Citing a Chinese military analyst, the English-language Global Times newspaper warned that if Japan continued dramatic increases in military spending and new security postures coordinated with the U.S. – particularly with regard to Taiwan – then the Chinese military “is sure to take countermeasures, including holding more exercises and patrols in international waters and airspace around Japan.”

It cited another analyst who said the new partnership “actually puts Japan in a riskier and more sacrificial position” in the region.

South Caucasus:

The area is moving closer to a military conflict between Iran, Azerbaijan, Turkey and Armenia.

The tensions between Tehran and Baku have been accumulating with numerous component parts. One of these is Azerbaijan’s foreign policy ties. Baku works closely with Iran’s main enemy – Israel. In just 10 months of 2022, the trade turnover between Azerbaijan and Israel amounted to US$1.2 billion, partially as a result of the Abraham Accords. Baku supplies Israel with oil and refined products, and buys hi-tech weapons – dual-use electronics, attack and reconnaissance drones, navigation and optics systems, precision-guided munitions.

In Iran, Israel ‘s activity is treated with hostility. Azerbaijan borders Iran by land and the Caspian Sea, which Iran regards as a potential corridor for Israeli special operations forces to use as a springboard to launch attacks on Iran.

Another controversial issue is the Zangazur corridor project. Azerbaijan wants to lay a direct road to the Nakhichevan exclave and extend this further to Türkiye. The route would pass through the Syunik region of Armenia. The implementation of the project can cut off Iran from Armenia, and therefore interfere with Tehran’s trade with the EAEU countries.

The Iranian message was clear: Tehran will not tolerate the closure of the Armenia-Iran border.

In addition, the construction of the corridor will lead to further strengthening in the Turkish region. Iran has a lucrative free trade agreement with the EAEU and this project would potentially hinder what have been growing trade volumes.

“There is evidence that the protests in the country were provoked from outside; at the end of January, drone strikes were carried out in Iran. Tehran suspects that Israel was involved from Azerbaijani territory” said Alexander Skakov, Deputy Director of the Institute of Oriental Studies of the Russian Academy of Sciences.

Viacheslav Morozov, Professor of EU-Russia Studies at the University of Tartu says that “America dreamed of blowing up the situation in the South Caucasus to cause a clash between its countries, and I think it will fail” .

Probably, the West will try to escalate things faster to oppose the peace deal that happened between Iran and Saudi Arabia in Beijing.

In conclusion, the United States places small countries as pawns in front of the great powers to provoke and drown them in problems. Like Finland, Taiwan, and Azerbaijan. The biggest losers are these countries that accept themselves and their people to be the fuel of US foreign policy.

Based on all of the above, we expect the BRICS countries to grow and expand, which necessitates the search for a unified currency covered with gold, and it may be digital to facilitate future transactions, with research to protect it legally.

The bloc is always searching for big markets, growing economies, and geopolitical status like Iran, Nigeria, and Egypt. But it should also accept countries that have significant percentage of voting power in international institutions like Mexico, Saudi Arabia and Türkiye in the IMF for example.

The views and opinions expressed in this article are solely those of the original author.

Key words: Global security; BRICS; China