[Cid_Yama]

The Kazakhstan - Turkmenistan - Iran railway link was officially inaugurated in October 2014.

Iran is currently working with Pakistan to create a rail link to India. In the meantime, India is shipping through the Bandar Abbas port in Iran.

You skip the horn of Africa, you bypass the Suez Canal, you bypass sailing around Europe completely (there is an Armenian rail link in the works to Eastern Europe).

The Kazakhstan-Turkmenistan-Iran railway connects with the rest of the Russian rail network via the Volga Railway at Astrakhan. So the rail line from the port of Bandar Abbas on Iran's southern coast to the Russian rail network is completed.

The Russian rail network already connects to China, but China has already built 2 train lines to the Indian border and plans to connect to India, Nepal and Butan by 2020.(a far shorter route) China said these trains will travel at 120 km per hour.


The new Berlin-Baghdad Railway?

Notwithstanding the U.S. pressure to scale down its engagement with Iran, official sources here said the country not only remains an important source of oil for India, but is crucial to opening up routes to Central Asian and Caucasian countries, where New Delhi's quest for hydrocarbons and minerals is gathering critical mass.

“We recognise that Iran is the key to connecting with Central Asia,” said the sources while referring to a major meeting last month on a proposed Russia-Iran-India promoted North-South corridor that would originate from Bandar Abbas leading to Russia and other countries via the Caspian Sea.

India has “taken the lead” and is “pushing hard” to put the missing rail links in place so that a seamless route from Bandar Abbas port to Russia and Central Asia opens up by next year by when the customs union of Russia-Kazakhstan-Byelorussia would have expanded to include other Eurasian countries.

Customs procedures

Besides the three original signatories, over 15 countries have joined the north-south project. In addition to putting in place missing railways links of about 200 km, all the sides will have to harmonise their customs procedures to make the endeavour workable. Currently Indian goods enter Russia through the Baltic ports of St. Petersburg and Kotka, the European port of Rotterdam and the Ukrainian ports of Illychevsk and Odessa.

Iran, said the sources, was also critical to stabilising Afghanistan as part of the Shanghai Cooperation Organisation (SCO) grouping after the NATO forces scale down their operations in 2014. Nearly all the countries surrounding Afghanistan are either members or observers to the SCO and they said, “we take it [the SCO] as an important platform to discuss the post-2014 situation in Afghanistan.”

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In 1888, the Oriental Railway from Austria, across the Balkans via Belgrade, Sofia, to Constantinople, was opened. This linked with the railways of Austria-Hungary and other European countries and put the Ottoman capital in direct communication with Vienna, Paris, and Berlin. It was to be significant for later events.

The Sultan, Abdul Hamid II, on November 27, 1899, awarded Deutsche Bank, headed by Georg von Siemens, a concession for a railway from Konia to Baghdad and to the Persian Gulf. In 1888 and again in 1893, the Sultan had assured the Anatolian Railway Company that it should have priority in the construction of any railway to Baghdad. On the strength of that assurance, the Anatolian Company had conducted expensive surveys of the proposed line. As part of the railway concession, the shrewd negotiators of the Deutsche Bank, led by Karl Helfferich, negotiated subsurface mineral rights twenty kilometers to either side of the proposed Baghdad Railway line.[22] Deutsche Bank and the German government backing them made certain that included the sole rights to any petroleum which might be found. The Germans had scored a strategic coup over the British, or so it seemed. Mesopotamian oil secured through completion of the Berlin-Baghdad Railway was to be Germany’s secure source to enter the emerging era of oil-driven transport.

A German-built rail link to Baghdad and on to the Persian Gulf, capable of carrying military troops and munitions, was a strategic threat to the British oil resources of Persia. Persian oil was the first crucial source of secure British petroleum for the Navy.

Turkey, backed and trained by Germany, had the potential, should it get the financial and military means, to launch a military attack on what had become vital British interests in Suez, the Persian route to India, the Dardanelles. By 1903 the German Reich was prepared to give the Sultan that means in the form of the Baghdad Railway and German investment in Ottoman Anatolia.

By 1913 that German engagement had taken on an added dimension with a German-Turkish Military Agreement under which German General Liman von Sanders, member of the German Supreme War Council, with personal approval of the Kaiser, was sent to Constantinople to reorganize the Turkish army on the lines of the legendary German General Staff. In a letter to Chancellor von Bethmann-Hollweg, dated April 26, 1913, Freiherr von Wangenheim, the German Ambassador to Constantinople declared, “The Power which controls the Army will always be the strongest one in Turkey. No Government hostile to Germany will be able to hold on to power if the Army is controlled by us…” [25].

As well in Serbia British military and intelligence networks were most active prior to outbreak of war. Major R.G.D. Laffan was in charge of a British military training mission in Serbia just before the war. Following the war, Laffan wrote of the British role in throwing a huge block on the route of the German-Baghdad project:

"If 'Berlin-Baghdad' were achieved, a huge block of territory producing every kind of economic wealth, and unassailable by sea-power would be united under German authority," warned R.G.D. Laffan. Laffan was at that time a senior British military adviser attached to the Serbian Army.

"Russia would be cut off by this barrier from her western friends, Great Britain and France," Laffan added. "German and Turkish armies would be within easy striking distance of our Egyptian interests, and from the Persian Gulf, our Indian Empire would be threatened. The port of Alexandretta and the control of the Dardanelles would soon give Germany enormous naval power in the Mediterranean."

Laffan suggested a British strategy to sabotage the Berlin-Baghdad link. "A glance at the map of the world will show how the chain of States stretched from Berlin to Baghdad. The German Empire, the Austro-Hungarian Empire, Bulgaria, Turkey. One little strip of territory alone blocked the way and prevented the two ends of the chain from being linked together. That little strip was Serbia. Serbia stood small but defiant between Germany and the great ports of Constantinople and Salonika, holding the Gate of the East...Serbia was really the first line of defense of our eastern possessions. If she were crushed or enticed into the 'Berlin-Baghdad' system, then our vast but slightly defended empire would soon have felt the shock of Germany's eastward thrust."

British intelligence thus instigated the assasination Of Austro-Hungarian heir to the throne, Archduke Franz Ferdinand by the Serbian Black Hand with the assistance of the Serbian Government in the hopes that it would incite Austria-Hungary to attack Serbia and break the rail link between Berlin and the Middle East.

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"If 'Berlin-Baghdad' were achieved, a huge block of territory producing every kind of economic wealth, and unassailable by sea-power would be united under German authority," warned R.G.D. Laffan.

The North-South Transport Corridor does the same under SCO authority.

Turkey is of special interest because it has been a long-standing NATO member. It had hoped to join the EU but it became clear that this was never going to happen. Instead under the leadership of Recep Erdoğan Turkey is moving towards the SCO.

Erdoğan was re-elected earlier this month by a comfortable majority and it will be interesting to see how quickly Turkey's new alignment evolves. Erdoğan must be aware that Asia is on the up while the EU declines, in which case Turkey as a front-line state is better off joining the SCO.

The SCO's influence extends beyond its boundaries, with China and India's diasporas populating much of the rest of south-east Asia. SCO members, particularly China and India, are also the largest consumers of Middle Eastern energy. And because they write the biggest cheques they have primacy over the west; so the swing away from the petro-dollar towards Asia is in the making. China also has sub-Saharan Africa sewn up, securing vital minerals such as copper from Zambia.

We must also consider why Russia is aggressively driving the pace of the SCO's development, and it's not just to escape the west's economic sanctions as many observers think. Fundamentally the SCO is about resources and the production of goods: Russia controls Asia's resources and China turns them into goods.

One of the first persons to identify the geopolitical importance of Russia's resources was Halford Mackinder in a paper for the Royal Geographical Society in 1904. He later developed it into his Heartland Theory. Mackinder argued that control of the Heartland, which stretched from the Volga to the Yangtze, would control the "World-Island", which was his term for Europe, Asia and Africa. Over a century later, Mackinder's theory resonates with the SCO.

The underlying point is that North and South America, Britain, Japan and Australasia in the final analysis are less important than Mackinder's World-Island. There was a time when British and then American primacy outweighed its importance, but this is no longer true. If Mackinder's theory is right about the overriding importance of undeveloped resources, Russia with the backing of the SCO's members is positioned to become the most powerful nation on earth.

The SCO is the greatest challenge yet mounted to American economic power, and Russia and China are clearly determined to ditch the dollar. We don't yet know what will replace it. However, the fact that the Central Bank of Russia and nearly all the other central banks and governments in the SCO have been increasing their gold reserves could be an important clue as to how the representatives of 3 billion Euro-Asians see the future of trans-Asian money.

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Gazprom to take payments only in Rubles or Yuan

Several months ago, when Russia announced the much anticipated "Holy Grail" energy deal with China, some were disappointed that despite this symbolic agreement meant to break the petrodollar's stranglehold on the rest of the world, neither Russia nor China announced payment terms to be in anything but dollars. In doing so they admitted that while both nations are eager to move away from a US Dollar reserve currency, neither is yet able to provide an alternative.

This changed in late June when first Gazprom's CFO announced the gas giant was ready to settle China contracts in Yuan or Rubles, and at the same time the People's Bank of China announced that its Assistant Governor Jin Qi and Russian central bank Deputy Chairman Dmitry Skobelkin held a meeting in which they discussed cooperating on project and trade financing using local currencies. The meeting discussed cooperation in bank card, insurance and financial supervision sectors.

And yet, while both sides declared their operational readiness and eagerness to bypass the dollar entirely, such plans remained purely in the arena of monetary foreplay and the long awaited first shot across the Petrodollar bow was absent.

Until now.

According to Russia's RIA Novosti, citing business daily Kommersant, Gazprom Neft has agreed to export 80,000 tons of oil from Novoportovskoye field in the Arctic; it will accept payment in rubles, and will also deliver oil via the Eastern Siberia-Pacific Ocean pipeline (ESPO), accepting payment in Chinese yuan for the transfers. Meaning Russia will export energy to either Europe or China, and receive payment in either Rubles or Yuan, in effect making the two currencies equivalent as far as the Eurasian axis is conerned, but most importantly, transact completely away from the US dollar thus, finally putin'(sic) in action the move for a Petrodollar-free world.

More on this long awaited first nail in the petrodollar coffin from RIA:

The Russian government and several of the country’s largest exporters have widely discussed the possibility of accepting payments in rubles for oil exports. Last week, Russia began to ship oil from the Novoportovskoye field to Europe by sea. Two oil tankers are expected to arrive in Europe in September.

According to Kommersant, the payment for these shipments will be received in rubles.

Gazprom Neft will not only accept payments in rubles; subsequent transfers via the ESPO may be paid for in yuan, the newspaper reported.

According to the newspaper, the change in currency was made because of the Western sanctions against Russia.

As a protective measure, Russia decided to avoid taking its payments in US dollars, which can be tracked and controlled by the United States government, Kommersant reported.

"Protective measure" meaning that it was the US which managed to Plaxico itself by pushing Russia to transact away from the US Dollar, in the process showing the world it can be done, and slamming the first nail in the petrodollar's coffin.

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Modi has taken to the BRICS like fish to water, which surprised most Indian observers who were visualising that the interest groups most vociferously backing his candidature in the parliamentary poll in April would expect him to follow a 'pro-American' foreign policy, driven also by the craving to adopt a muscular approach to India's problematic relationships with China and Pakistan.

However, Modi's meetings on the sidelines of the BRICS summit with Xi and Russian President Vladimir Putin brought out his conviction that India's long-term interests are best served by forging closer strategic partnerships with these two world powers.

Again, most expectedly, instead of beating war drums, Modi let loose peace doves into the South Asian skies.

And, least of all, came his audacious decision to demand that Delhi cannot ratify the World Trade Organisation's so-called trade facilitation agreement if it jeopardised India's food security.

India still remembers a time when it's food was loaded on ships bound for Britain while it's dockworkers died of starvation.

Suffice to say, Modi supported the emergence of the BRICS development bank with great deliberation, knowing fully well that such a move challenges the dominance of the US dollar in the world economy and will seriously undermine the Bretton Woods system that provided a vital underpinning for the advancement and preservation of the United States' global hegemony for the past several decades.

It is entirely conceivable that at some point sooner rather than later the SCO countries may move toward trading in their national currencies, creating banking institutions to fund intra-regional projects and forming preferential trade regimes.

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China Launches AIIB to Rival World Bank Without US Allies After Pressure from Washington

Representatives of 21 Asian nations have convened in Beijing to inaugurate the Asian Infrastructure Investment Bank (AIIB), seen by some as a regional rival to the World Bank.

The Chinese-led initiative will be capitalised with $50bn (£31bn, €39.5bn), which will finance infrastructure projects within the region. China is set to put up half the capital required.

The countries present at the signing ceremony were: Bangladesh, Brunei, Cambodia, China, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, the Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan, and Vietnam.

The Chinese Finance Minister described the AIIB as "an open and inclusive institution". It will be headquartered in Beijing.

Notable absentees from the signing ceremony were the United States' closest regional allies, Japan, South Korea, and Australia, with media reports claiming the US had exerted pressure on the countries not to join up.

China is also the driving force behind the New Development Bank - known colloquially as the BRICS Bank, after its member nations Brazil, Russia, India, China, and South Africa - which is also set to fund infrastructure projects to the tune of $50bn, with that capitalisation set to rise to $100bn.

It's a commonly held view that China will attempt to use the bank to extend its political influence. In Africa, it has often been criticised for building roads in exchange for access to commodities. According to analysts, the AIIB could be used as a tool to bolster Chinese allegiances as it attempts to usurp the US as the dominant power in the region.

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A clear view of the 'grand game' taking place is necessary to understand what is going on in the world, including knowing who the opposing parties are.

This is a struggle between the Western Elite, the IMF and the World Bank, and what is shaping up to be, the rest of the world.

The number of defections to the other side is astounding. Did you notice Kuwait, Oman and Qatar on the list of members of the AIIB?

Vibrant trade and infrastructure win out against 'austerity' and abject poverty every time.

The Western Plutocracy maintained power by ensuring there were no alternatives. Backed up by Western military power. The alternative that exists now is so bright, it is drawing nations like moths to a flame. And Russia/China together can easily counter the Western military threat. The bullies that had been terrorizing the planet have been neutralized, and though not totally gone yet, on the way out.

Unfortunately for the American people, it will take much more to achieve their freedom from these Gangsters.

The economic power is shifting to the East.

[Newfie]

Interesting times indeed Cid.

We have lived a blessed life, at the apex of empire.

[Whitefang]

Yes indeed,interesting times.

Turkey´s large army-economy better places her final bets on the East, then India might follow, a devastating blow to our western marine world empire of Bilderberg and NATO now making rule.
India is tied up with the dollar ponzi scheme though.....civil war with over a billion people fighting over water-food and energy.
Last world war, three strikes and we´re out.
I brought stuff, trucking for our Dutch airforce, a patriot battery near the Syrian border, from Italy by ferry to Greece, then passing Istanbul and south to the border, makes me working for the terror ring called NATO, risky business......

Time will tell how this turns out, Europe already feels the squeeze, the Belgians are prepping for power shortage this winter. There will be no safe city or even a township in the end I suppose.

http://www.powerengineeringint.com/arti ... -cuts.html

The Belgian government is making contingency plans as the impact of the closure of half its nuclear capacity looks set to see the imposition of planned power cuts this winter.
Vessels enclosing the Doel 3 and Tihange 2 nuclear reactors were found to be suffering from micro fractures which led to their closure earlier this year. However another blow was suffered just a fortnight ago when Doel 4 plant was shut due to an oil leak, believed to have been caused by sabotage.
All three plants are likely to remain out of action until the end of the year, and it has led Belgium's parliament to hold a special session to discuss the situation. It has commissioned the national crisis centre to set out possible scenarios in case of a power shortage this winter.

http://www.prisonplanet.com/top-cop-mil ... roups.html

During the height of the Ferguson unrest earlier this summer, MSNBC host Ed Schultz opined that such militarized equipment and vehicles was needed to deal with “anti-government” groups, while former Marine Paul Szoldra offered a different view, warning that scenes in Ferguson illustrated the “terrifying” result of the militarization of police, with the American people now being treated like insurgents in Afghanistan and Iraq.
Former Marine Corps Colonel Peter Martino, who was stationed in Fallujah and trained Iraqi soldiers, warned last year that the Department of Homeland Security is working with law enforcement to build a “domestic army,” because the federal government is afraid of its own citizens.
Martino was speaking at a council meeting concerning a decision to purchase a BearCat armored vehicle. The purchase of the vehicle was mired in controversy after the city’s Police Chief wrote in an application filing to the DHS that the vehicle was needed to deal with the “threat” posed by libertarians, sovereign citizen adherents, and Occupy activists in the region

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[Keith_McClary]

larger image
http://www.railnews.co.in/northeast-ind ... y-network/

[Shaved Monkey]

London to Beijing in 2 days

China has advantages in this game: enormous economies of scale, the absence of a political cycle to disrupt long-term planning, state-owned rail builders with deep pockets, and not least control of the media.

[KaiserJeep]

I will only interject the comment that trains are an obvious technology that can continue to transport goods and passengers in a post-oil age, using coal for fuel.

In fact there are Marine diesels and shore-based diesel Power Plants fuelled by powdered coal that require only about 5% liquid bunker fuel to keep running. I do not doubt that this technology can be fitted to diesel-electric trains, we will not be forced to fall back on the lesser efficiency steam trains.

I LOVE steam trains, but they are not economic compared to diesel engines.

[AgentR11]

On the oil/gas for Yuan/Ruble.

Ruble went full float yesterday. Russian central bank will no longer buy/sell ruble/dollar to manage the value of the currency, it will sit at whatever price the market decides. They'll still watch liquidity and pour cold water on speculators at unexpected times; but the era of Russian oligarchs living in London, doubling their money at the expense of the RF reserves is over. Sanctions provided the motivation to hurry, and I believe also the excuse for public consumption over the discomforts involved in the transition.

None of those Asian plans could work without a free floating currency outside the dollar's control. I wish China would follow quickly, but with the ruble floated, the need is no longer pressing; if one floats and they trade freely, the Yuan can't get priced to stupidly. It may be better this way for China as well; they've got a banking mess to unwind, and are in the middle of a decadal shift from export driven, to domestic consumption driven production. That's more than enough to keep them busy.

[Cid_Yama]

Just as European nations are trying to wean themselves from an erratic supply of Russian natural gas, so Russia appears determined to reduce its reliance on European customers by signing a second enormous deal to supply gas to China.

On Nov. 9 in Beijing, Russian President Vladimir Putin and Chinese President Xi Jinping signed a preliminary agreement under which the Kremlin-run monopoly Gazprom eventually would supply nearly one-fifth of the gas China is expected to need until 2020.

Under the new deal, nearly as massive as the $400 billion agreement reached earlier this year, Gazprom said it plans to supply up to 30 billion cubic meters of gas per year from western Siberia to China in the next 30 years. Russia's government-owned oil company Rosneft also would sell 10 percent of its share in a subsidiary, Vankorneft, to the China National Petroleum Corp., owned by the Beijing government.

As Europe moves to wean itself from Russian gas, and Russia moves to wean itself from European customers, China is weaning itself from its current reliance on coal. China's industrial centers are choking with toxic smog, a state that in June led Xi to declare a "revolution" in energy use by changing how it consumes energy.

As part of Xi's move to use less coal, under the new deal China will import up to 30 billion cubic meters of cleaner-burning gas per year through the proposed Altai pipeline from western Siberia. Under the previous deal, Beijing will import 38 billion cubic meters of gas from eastern Siberia via the Power of Siberia pipeline, where construction began on Sept. 1 .

The flow of gas to China may begin in four to six years, Gazprom CEO Alexey Miller told reporters in Beijing. Once that happens, China will surpass Germany as Russia's largest gas customer.

"Cooperation between China and Russia is utterly important in order to keep the world within the limits of international law, to make it more stable, more predictable," Putin told Xi during the signing ceremony at China's Great Hall of the People.

For his part, Xi said, "Together we have carefully taken care of the tree of Russian-Chinese relations. Now fall has set in, it's harvest time, it's time to gather fruit."

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[Cid_Yama]

Recent trade deals and high-level cooperation between Russia and China have set off alarm bells in the West as policymakers and oil and gas executives watch the balance of power in global energy markets shift to the East.

The reasons for the cozier relationship between the two giant powers are, of course, rooted in the Ukraine crisis and subsequent Western sanctions against Russia, combined with China's need to secure long-term energy supplies. However, a consequence of closer economic ties between Russia and China could also mean the beginning of the end of dominance for the U.S. dollar, and that could have a profound impact on energy markets.

Before the 20th century, the value of money was tied to gold. Banks that lent money were constrained by the amount of their gold reserves. The Bretton Woods Agreement of 1944 established a system of exchange rates that allowed governments to sell their gold to the U.S. Treasury. But in 1971, U.S. President Richard Nixon took the country off the gold standard, which formally ended the linkage between the world's major currencies and gold.

The U.S. dollar then went through a massive devaluation, and oil played a crucial role in propping it back up. Nixon negotiated a deal with Saudi Arabia whereby in exchange for arms and protection, the Saudis would denominate all future sales of oil in U.S. dollars. Other OPEC members agreed to similar deals, ensuring perpetual global demand for greenbacks. The dominance of the U.S. "petrodollar" continues to this day.

Recent news coming out of Russia, however, suggests that the era of U.S. dollar dominance could be coming to an end, due to increasing competition from the world's second largest economy and primary consumer of commodities, China.

China and Russia have been furiously signing energy deals that indicate their mutual energy interests. The most obvious is the $456 billion gas deal that Russian state-owned Gazprom signed with China in May, but that was just the biggest in a string of energy agreements going back to 2009. That year, Russian oil giant Rosneft secured a $25 billion oil swap agreement with Beijing, and last year, Rosneft agreed to double oil supplies to China in a deal valued at $270 billion.

Liam Halligan, a columnist for the Telegraph, says "the real danger" of closer Russian-Chinese ties is not a bust-up between China and the U.S., which could threaten crucial shipping routes for China-bound coal and LNG, but its impact on the U.S. dollar. "With China now the world’s biggest oil importer and the U.S. increasingly stressing domestic production, the days of dollar-priced energy, and therefore dollar-dominance, look numbered."

In June, China agreed with Brazil on a $29 billion currency swap in an effort to promote the Chinese yuan as a reserve currency, and earlier this month, the Chinese and Russian central banks signed an agreement on yuan-ruble swaps to double trade between the two countries. Analysts says the $150 billion deal, one of 38 accords inked in Moscow, is a way for Russia to move away from U.S. dollar-dominated settlements.

It is no secret that Beijing has been looking to promote the yuan as an alternative reserve currency. Having that status would allow China cheap access to world capital markets and cheaper transaction costs on international trade, not to mention increased clout as an economic power commensurate with its rising proportion of world commerce.

"[It] is clear that China is laying foundations for wider acceptance of the yuan," said Karl Schamotta, a senior market strategist at Western Union Business Solutions," as quoted in an International Business Times article. IBT pointed out that "more than 10,000 financial institutions are doing business in Chinese yuan, up from 900 in June 2011, while the pool of offshore yuan, non-existent three years ago, is now near 900 billion ($143 billion). And the proportion of China’s exports and imports settled in yuan has increased nearly sixfold in three years to nearly 12 percent."

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Putin says China, Russia to settle more trade in yuan

Russia and China intend to increase the amount of trade settled in the yuan, President Vladimir Putin said on Monday in remarks that would be welcomed by Chinese authorities who want the currency to be used more widely around the world.

Speaking at an Asia Pacific Economic Cooperation summit in Beijing, Putin also ruled out capital controls for Russia and vowed to keep its foreign debt level below 15 percent of gross domestic product (GDP).

"As part of our cooperation with this country (China), we intend to use national currencies in mutual transactions," Putin said.

"The initial deals for rouble and yuan are taking place. I want to note that we are ready to expand these opportunities in (our) energy resources trade."

Spurred on by their often testy relations with the United States, Russia and China have long advocated reducing the role of the dollar in international trade.

Curtailing the dollar's influence fits well with China's ambitions to increase the influence of the yuan and eventually turn it into a global reserve currency.

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[Cid_Yama]

Russia pivoted decisively towards the East on Sunday, after signing another mega-energy agreement with China, which could dwarf Europe as the largest consumer of Russian gas once the project is completed.

Russian President Vladimir Putin’s fifth meeting in a year with his Chinese counterpart, Xi Jinping, on the sidelines of the summit of the Asia-Pacific Economic Conference (APEC), yielded an agreement that seemed to rebuff Europe, which had imposed sanctions on Russia following the crisis in Ukraine.

China would receive 30 billion cubic meters (bcm) of gas per year along the so-called “western” or "Altay" route, according to the agreement. This would supplement the proposed 38 bcm Russian gas to China that would flow through the “Power of Siberia” pipeline, passing along the “eastern route”. The “eastern route” deal, worth $400 billion, was signed in May, and work on the project has already commenced.

Sunday’s agreement is meant to lay the groundwork for a full-fledged contract later. “We have reached an understanding in principle concerning the opening of the western route,” said Mr. Putin, before he flew into Beijing for the APEC summit. “We have already agreed on many technical and commercial aspects of this project, laying a good basis for reaching final arrangements,” he observed.

Aleksey Miller, a senior member of Mr. Putin’s inner circle and head of the energy giant Gazprom, announced that once it materialises, the deal would hedge Moscow’s dependence on the European energy markets. “After we have launched supplies via the “western route,” the volume of gas deliveries to China can exceed the current volumes of export to Europe,” he observed.

Analysts point out that China is pushing for Russian gas supplies, sent along a more secure land corridor, apprehending that shipments of oil and gas along the sea route are now more vulnerable to disruption after the United States announced its China-centric “Asia Pivot” military doctrine.

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[Cid_Yama]

China wins support for Asia-Pacific trade proposal

Leaders of Asia-Pacific economies agreed Tuesday to begin work toward possible adoption of a Chinese-backed free-trade pact, giving Beijing a victory in its push for a bigger role in managing global commerce.

"This is a historic step in the direction of an Asia-Pacific free trade area," said Chinese President Xi Jinping at a news conference.

China is promoting the proposed Free-Trade Area of the Asia Pacific despite U.S. pressure to wrap up other trade negotiations. Analysts see it as a response to a U.S.-led initiative, the Trans-Pacific Partnership, which includes 12 countries but excludes China. The TPP talks have been delayed repeatedly by disputes over the sweeping nature of its market-opening proposals.

"(The U.S.-led) TPP is being used to push aside China and to weaken China's economic core status," said Wu Xinbo, director of the Center for American Studies at Fudan University in Shanghai. Promoting its own initiative "will give China a bigger right to speak in the Asia-Pacific — to have a new status."

The APEC leaders also promised to work more closely to combat official corruption. That is a special concern for Beijing, which is stepping up efforts to pursue officials who flee abroad with stolen public money.

On the eve of the summit, Beijing announced a free-trade agreement with South Korea. Also Monday, regulators approved a plan to open Chinese stock markets wider to foreign investors by linking exchanges in Hong Kong and Shanghai. That followed the weekend announcement of a $40-billion Chinese-financed fund to improve trade links between Asian economies.

Earlier this year, Beijing launched a regional development bank with 20 other governments. In May, Xi called for a new Asian structure for security cooperation based on a group that includes Russia and Iran but excludes the United States.

China says its motives are benign, but its growing economic weight as the top trading partner for most of its neighbors from South Korea to Australia could erode U.S. influence.

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[Cid_Yama]

The major financial and economic institutions, which experts sometimes call the "international financial architecture", no longer correspond to the balance of power and the shifting centre of gravity in the world economy.

The International Monetary Fund, World Bank and regional development banks are all dominated by the United States and its allies in terms of voting rights, capital structure, headquarters location and staffing.

Efforts to reform them to give a greater role to China and the other fast-growing developing economies have largely proved unfruitful.

The multilateral lending institutions are severely undercapitalised and have nowhere near enough resources to meet the enormous infrastructure needs across Asia, Africa and Latin America.

The result is that many multilateral institutions appear to be outdated, too small and entrenched in colonialist approaches to development.

There is still an assumption that economies of developing countries are defined by their relationship with their more developed counterparts. But that world has vanished over the last decade.

More than half the exports from developing economies were sent to other developing economies in 2013, according to the World Trade Organization ("International Trade Statistics 2014").

Countries in Asia sent more than 60 percent of their exports to other nations in Asia and to Africa and the Middle East, compared with just over 15 percent each to North America and Europe.

As the world's greatest export powerhouse, China has accumulated vast foreign exchange reserves and is now becoming a major supplier of capital.

Prior to the financial crisis, that capital was tied up passively and uselessly in U.S. Treasury bonds. Now China wants to use its capital more productively to invest in infrastructure in its major trading partners and at the same time buy more economic and political influence.

There is nothing new in the idea that countries seek to turn financial capital into political power. Britain pursued the same approach in the 19h century, and the United States has done so successfully since World War Two.

Market access and capital can all be traded for various forms of influence. The Marshall Plan traded U.S. economic assistance in European reconstruction for a pro-American orientation in European foreign policy.

As the balance of power within the global economy shifts, it is inevitable that the international economic architecture will have to evolve.

Some western foreign policy specialists have naively assumed that emerging markets would become integrated into existing post-war, western-dominated structures of power and governance.

But it was always at least as likely that those institutions would have to adapt and change to accommodate the rising economic and financial power of emerging markets.

Just as access to American markets and capital was once a key component of U.S. diplomacy, China is now employing its financial and trade muscle to win friends and influence.

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The fact that the 30-year Gazprom deal was transacted in a currency swap denominated in yuan—the first time an energy deal circumvented the dollar—is a red flag, according to Silverstein. "If the dollar loses its dominance in international commerce, its value will plummet. That would create a tipping point for the U.S. economy overnight."

He noted that China, in its quest for resources to fuel its large economy, has engineered other yuan currency swaps. Among them: a $30 billion swap with Brazil in March to bolster BRICs countries and an $11 billion swap with Argentina announced last month to help the Latin nation bolster its foreign reserves.

According to Russia's Bureau of Statistics, trade between Russia and China amounted to more than $59 billion so far this year in sectors ranging from energy to finance to technology.

A delegation led by Premier Li Keqiang signed a package of deals on Oct. 13 in Moscow. Among them was an agreement to swap $25 billion in Chinese yuan for Russian rubles over three years, and cooperation on satellite navigation systems and high-speed rail. They also plan to build the first rail bridge over their common border and an ice-free port in Russia's Far East.

The ties are also spilling over to arms sales. Reuters has reported that it is likely Russia will sign contracts for the delivery of the S-400 missile systems and Su-35 fighter jets to China next year. It is also possible that Russia may supply China with its newest submarine, the Amur 1650.

"They are, in deeply troubling ways, changing the world by shaking the foundations of an order that has ensured the absence of major conflict and paved the way for unprecedented prosperity."

Chang believes that the growing cooperation between the two countries will only serve to escalate tensions with the United States, with both Russia and China finding less incentive to cooperate with America.

China has huge leverage in the global economic order and is trying to overturn it, at least in the monetary sense.

"Both are interested in a multipolar world instead of the U.S. dictating the international sphere," Stratfor's Goodrich said.

Eurasia Group president Ian Bremmer describes a 'cold war on business' and points out that the United States should pay close attention to what he calls the unwinding of business ties with Russia and China as China cracks down on Fortune 500 companies. He expects that escalating tensions with Russia will continue.

"As China and Russia pivot toward each other, American businesses—and their universal economic values—will struggle to maintain a global foothold," Bremmer wrote.

Chang sums it up nicely: "If they do in fact form an enduring partnership, it could mean the end of the post–Cold War era. What follows next, for better or worse, will surely be momentous."

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[Shaved Monkey]

The major concerns for the US economy is that it needs to grow just to tread water, let alone improve standards, is it is being cut out of the growth loop and having economies grow without the US profiting,but also having it competitors profit at their expense.
The pyramids base is getting eroded.
The increase in rail infrastructure also by passes the US's natural strength of controlling the oceans with their navy.
It used to be easy in the past give them US TV to instil the want of the American Dream,lots of resources to try and achieve it.
Control nations resources by taking profits through world bank loans or dodgy deals with propped up dictators.
Squash "socialist" (profit for the people)uprising as it reduces the resource exploitation pool.

Chinas playing all the same games the US and the UK and every other empire got away with in the past.
The markets getting smaller and the monopoly now has competition.
Its getting interesting ,the times are changing

[Cid_Yama]

What really ticks me off about our policy, is that it gave Putin cover for the one trick I don't think he could have survived otherwise. And that was the ruble float. Their bank had pumped up the ruble so high, and for so long; there was no way Russia could have avoided a 2-3 year period of very high inflation, for no apparent reason acceptable to Vlad Six-Pack. Along come sanctions!!! WOOHOOO, their bank drops the hammer on currency support and poof, they get to float, true market valuation, un-manipulated, for the ruble. *WE* let them off the hook. Now that stupid Eurasian Union thing can work without dollar clearance access; a few countries are a bit irritated by their messed up rates with the ruble, but they'll manage solutions that are consistent with each states' policies.

People think the SCO is about the renminbi/yuan; but its not. China is not anywhere near ready to release their currency to market valuation.... but, to buy oil and gas and coal and electricity, they needed some not-dollar currency, trading at market rates with the dollar, but whose bank clearing procedures were not controlled by Washington and Brussels. The ruble is it. Its not a hegemon currency, don't overreach; but with a bajigaton of gold in Moscow and Beijing, and market trading rates of ruble to dollar, and oil priced cleanly in dollars; they can execute trades in ruble, tweak gold account balances back and forth to balance, and they can make the complete trade circle outside the control of the dollar and euro zone.

Worse... our sanctions against Iran are about to lose their teeth as well. ruble/rial trade can now work, same trick; and they are putting the agreement together now; shipping across the Caspian, again, completely outside the control of the EU/US. Is there anything material you can think of that Iran needs that Russia and China via Russia can not provide? I'm drawing a blank. Iran's biggest problem is agricultural limitations, and Russia is a massive grain exporter. Our policies are gluing together all our adversaries in market complementary fashion. Personally, I couldn't have dreamed up a worse end result, even if we'd been deliberately trying to create a potential adversary that could match us in scale. If SCO/EEU eventually pull in India (and there are great problems there, both geographic and economic), they'll outclass us by a long, long way; with potential growth on a scale that seals the deal on the end of the Western empire.

Oh and London... I wouldn't worry about London; they'll be well and solidly in the SCO/EEU sphere if it becomes the lead trading vehicle.

I would like to refer you to the first post in this thread. With the completion of the Kazakhstan-Turkmenistan-Iran railway, the backbone of the transportation hub is completed. It connects Iran to Russia to China and soon will link to Pakistan and India. Iran, Pakistan, and India are all slated to become full members of the SCO in July.

India is already in the RIC banking alliance. India is also connected to the transportation hub via a shipping link to Bandar Abbas, but will soon be connected by rail.

Western journalists keep saying "if" such an economic alliance were formed...

It already has been formed, and they're full speed ahead.

As I said earlier, Vibrant trade and infrastructure win out against 'austerity' and abject poverty every time.

[Cid_Yama]

Europe Jumps Ship, Joins China

Historians may record March 2015 as the moment when China's chequebook diplomacy came of age, giving the world's number two economy a greater role in shaping global economic governance at the expense of the United States and the international financial institutions it has dominated since World War Two.

This month European governments chose, in an ill-coordinated scramble for advantage, to join a nascent, Chinese-led Asian Infrastructure Investment Bank (AIIB) in defiance of Washington's misgivings.

British finance minister George Osborne, gleeful at having seized first-mover advantage, stressed the opportunities for British business in a pre-election budget speech to parliament last week.

"We have decided to become the first major western nation to be a prospective founding member of the new Asian Infrastructure Investment Bank, because we think you should be present at the creation of these new international institutions," he said after rebuffing a telephone plea from U.S. Treasury Secretary Jack Lew to hold off.

The move by Washington's close ally set off an avalanche. Irked that London had stolen a march, Germany, France and Italy announced that they too would participate. Luxembourg and Switzerland quickly followed suit.

China's official Xinhua news agency reflected Beijing's delight.

"The joining of Germany, France, Italy as well as Britain, the AIIB's maiden G7 member and a seasoned ally, has opened a decisive crack in the anti-AIIB front forged by America," it said in a commentary.

"Sour grapes over the AIIB makes America look isolated and hypocritical," it said.

Dutch Prime Minister Mark Rutte will meet Chinese President Xi Jinping this week. Officials said the Netherlands was weighing whether to join but it may have missed the deadline to become a founder member.

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The RMB is already traded on currency markets in Singapore, London, and elsewhere. Many Asian central banks already include it in their reserves. China now has currency swap agreements with virtually every nation in the Pacific region, most in Europe, and many elsewhere. These provide for direct trade in RMB, skipping the long-established passage through dollars.

A Shanghai free-trade zone now opening will include spot and futures markets for crude oil trading—trading in RMB, of course. How big is especially big? Recall: When American troops occupied Iraq in 2003, they immediately secured the petroleum ministry—and on the spot obliged Iraqi officials to rescind Saddam’s two-year-old law mandating that Iraq conduct its oil trade in euros.

There’s no question anywhere—and certainly not in Washington—that the AIIB and the other institutions Beijing now sponsors will accelerate the advance of the RMB as a reserve currency.

Washington’s genuine intent is as it has been for years amid rising clamor: It refuses to countenance any dilution of its influence as exercised through the Bretton Woods multilaterals. Washington’s de facto veto power in these post-1945 institutions is as pervasive as critics have long charged; an overweening dominance is embarrassingly exposed.

Japan and Australia over the weekend hinted they would join next week.

[Cid_Yama]

South Korea faces a litmus test that U.S. policy-makers believe will show whether the government in Seoul is “pro-Chinese” or “pro-American.” In the face of U.S. pressure to stay clear of what the Americans see as a bitter rival, South Korea is about to bite the bullet on joining China’s Asian Infrastructure Investment Bank.

China’s foreign minister, Wang Yi, in Seoul last weekend for a trilateral meeting with Korea’s foreign minister, Yun Byung-se, and Japan’s foreign minister, Fumio Kishida, lobbied hard for Korean and Japanese membership.

The display of easy-going friendship among the three foreign ministers provided still more evidence of what is turning into an humiliating experience for the United States — that is, defiance by America’s closest friends and allies of U.S. pleas to boycott China’s invitations to join AIIB.

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Britain's defiance appears to have given the rest 'permission' to do the same.

As Don Rickle's character in Kelly's Heroes said, "Business is business."

Next question, Will freeing themselves from US economic dominance now allow them to free themselves from US military dominance as well?

[Cid_Yama]

China and Russia have taken the lead in establishing the Asian Infrastructure Investment Bank (AIIB), seen as a rival organisation to the World Bank and the Asian Development Bank, which are dominated by the United States with Europe and Japan.

These banks do business at the behest of the old Bretton Woods order. The AIIB will dance to China and Russia's tune instead.

The geopolitical importance was immediately evident from the US's negative reaction to the UK's announcement this week that it would join the AIIB. And very shortly afterwards France, Germany and Italy also defied the US and announced they might join. In the Pacific region, one of America's closest allies, Australia, says she is considering joining too along with New Zealand. The list of US allies seeking to join is growing. From a geopolitical point of view China and Russia have completely outmanoeuvred the US, splitting both NATO and America's Pacific alliances right down the middle.

This is much more important than political commentators generally realise. We must appreciate that anything China does is planned well in advance. Here is the relevant sequence of events:

• In 2002 China and Russia formally adopted the founding charter for the Shanghai Cooperation Organisation, an economic bloc that today contains about 35% of the world's population, which will become more than 50% when India, Pakistan, Iran, Afghanistan and Mongolia join, which is their stated intention. Russia has the resources and China the manufacturing power to develop the largest internal market ever seen.

• In October 2013 George Osborne was effectively summoned to Beijing because China wanted London to be the base to develop renminbi-denominated financial instruments. London has served China well, with the UK Government even issuing the first renminbi-denominated foreign (to China) government bond. The renminbi is now on the way to being a fully-fledged international currency.

• The establishment of an infrastructure bank, the AIIB, will ensure the lead funding is available for the rapid development of road, rail, electric and electronic communications throughout the SCO, ensuring equally rapid economic development of the whole of the Asian continent. It could amount to the equivalent of several trillion dollars over time.

The countries that are applying to join the AIIB realise that they have to be members to access what will eventually become the largest single market in the world. America is being frozen out, the consequence of her belligerence over Ukraine and the exercise of her hegemonic power through the dollar. America's allies in South East Asia are going with or will go with the new AIIB, and in Europe commercial interests are driving America's NATO partners away from her, turning the Ukraine from a common cause into a festering liability.

The more one thinks about it, the creation of the AIIB is a masterstroke of tactical genius.

China has sufficient political authority and internal control to survive a rapid deflation of bank credit. When this inevitably happens the economic consequences for the west will be very serious. The last thing America and the dollar needs is a deflationary shock from China.

The silver lining for us all is a peace dividend: it is becoming less likely that America will persist with a call to arms, because support from her allies is melting away leaving her on her own.

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[Cid_Yama]

China's Influence Set to Climb

Seven decades after the end of World War II, the international economic architecture crafted by the U.S. faces its biggest shakeup yet, with China establishing new channels for influence to match its ambitions.

Three lending institutions with at least $190 billion are taking shape under China’s leadership, one of them informally referred to as a Marshall Plan -- evoking the postwar U.S. program to rebuild an impoverished Europe. Also this year, China’s Yuan may win recognition as an official reserve currency, a recognition of its rising use in trade and finance.

China’s clout has been expanding for decades, as its rapid growth allowed it to snap up a rising share of the world’s resources, its exports penetrated global markets, and its bulging financial assets gave it power to make big individual loans and purchases. Now, the creation of international lending institutions is leveraging that economic influence closer to the political and diplomatic arenas, as U.S. allies defy America to back China’s initiative.

“This is the beginning of a bigger role for China in global affairs,” said Jim O’Neill, U.K.-based former chief economist at Goldman Sachs Group Inc., who coined the term BRICs in 2001 to highlight the rising economic power of Brazil, Russia, India and China.

Chinese President Xi Jinping’s vision of achieving the same great-power status enjoyed by the U.S. received a major boost this month when the U.K., Germany, France and Italy signed on to the Asian Infrastructure Investment Bank. The AIIB will have authorized capital of $100 billion and starting funds of about $50 billion.

Canada is considering joining, which would leave the U.S. and Japan as the only Group of Seven holdouts.

Australian Prime Minister Tony Abbott’s cabinet approved negotiations to join too, according to a government official who asked not to be identified as the decision hasn’t been made public. Founding membership will be finalized as soon as April 15, a Chinese official said Wednesday.

The new China-backed institutions -- the infrastructure bank, a $50 billion development bank in conjunction with fellow BRICS nations and a $40 billion fund to revive the ancient Silk Road trade route -- are being set up after years of frustrated attempts by China and other emerging nations to revamp the existing international financial institutions to better reflect the shape of the global economy.

China plans to spend $40 billion to revive the centuries-old Silk Road trade route between Asia and Europe, an idea raised by Xi in a 2013 speech in neighboring Kazakhstan.

Some analysts have likened the plan to the postwar effort to help Europe that helped establish the U.S. as a regional economic power. A detailed plan may be unveiled at China’s Boao Forum conference starting Thursday, where Xi is scheduled to speak, according to Australia & New Zealand Banking Group Ltd.

Announced in July, the BRICS’ New Development Bank, to be based in Shanghai with initial capital of $50 billion, is the third building block of a China-centered international economic architecture. In addition to the original four BRIC nations, the fifth country is South Africa.

Yu Yongding, a former adviser to China’s central bank, said that “Americans must learn to behave in a humbler way” to maintain their leadership in global economic circles.

“The world has changed,” Yu said.

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[Cid_Yama]

Australia said Sunday it will sign an agreement to become a prospective founding member of a China-backed infrastructure bank.

China and 20 other countries signed a memorandum of understanding last October to establish the Beijing-headquartered US$50 billion Asian Infrastructure Investment Bank (AIIB) bank.

Britain, France, Germany, Italy and Russia have also announced plans to join. South Korea on Thursday was the latest country with close ties to the US to say it would also seek membership.

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Turkey has applied to join the Asian Infrastructure Investment Bank (AIIB) as a prospective founding member, the Chinese Ministry of Finance said.

The application deadline for prospective founding members is March 31. Twenty-one countries signed a Memorandum of Understanding (MoU) last October in Beijing on the bank. Other countries, including Indonesia and New Zealand, soon followed.

Britain, France, Germany, Italy, Luxembourg and Switzerland have applied to join the investment bank, which now has 27 prospective founding members.

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Taiwan expressed its wish to join the Beijing-led Asian Infrastructure Investment Bank (AIIB) as its representative met with Chinese leader Xi Jinping at an economic forum that opened in China yesterday.

Former Vice President Vincent Siew, heading Taiwan's delegation to the Boao Forum taking place on Hainan Island, conveyed the message during his brief meeting with Xi.

Siew reportedly told Xi that it is part of Taiwan's long-standing policy to play a part in global and regional economic cooperation, such as the AIIB project.

“Good, good, good,” Xi was reported as replying to Siew — an answer meaning more of an acknowledgement of Taiwan's intentions than an outright acceptance.

China's top official handling cross-strait affairs, Zhang Zhijun, later told the press that Taiwan definitely stands a chance of joining the AIIB.

He noted that there had not been much discussion in Taiwan about the AIIB until the last few days, and Beijing has yet to receive a formal request from Taipei about joining the investment body.

So far, more than 30 countries have applied to join the AIIB.

China confirmed yesterday that Britain and Switzerland have been formally accepted as founding members of AIIB, following the acceptance of Brazil the previous day.

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Denmark on Saturday confirmed its intention to join the Asian Infrastructure Investment Bank (AIIB) as a founding member.

In a press release offered by the Danish embassy in Beijing, Danish Minister of Trade and Development Mogens Jensen said it is a significant and exciting development in the world order that China is now establishing the AIIB.

"I am very happy that our government has taken this step," said Friis Arne Petersen, Danish Ambassador to China, adding that by joining the AIIB Denmark can help with the poverty eradication in the region.

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The Netherlands intends to join the Asian Infrastructure Investment Bank (AIIB), Prime Minister Mark Rutte said on Saturday, becoming the latest U.S. ally to seek membership in the China-led institution despite Washington's misgivings.

Rutte announced the decision on his official Facebook page during a visit to China and after a meeting with President Xi Jinping.

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[peripato]

What's it all for? It's not like growth can continue for very much longer, so these train links seem like a colossal waste.