America Has Lost!

War, the Vietnamese dong, and the Eurasian Union

The recent statement by Philippine President Rodrigo Duterte regarding the countries relationship with the United States puts a fine point on the transition markers of the international monetary transformation.  This point should now be considered the counter pivot to Obama’s Asian pivot and the first moment when China has fundamentally geopolitically gained the upper hand in the South China Sea.

Duterte was in China for a state visit.  While there he said the following:
“In this venue, your honors, in this venue, I announce my separation from the United States. Both in military, not maybe social, but economics also.  America has lost.”

The impact of saying this in front of 200 business people interested in new commercial alliances is one of the most profound and straight forward statements regarding the nature of the multilateral transformation.  This should build confidence in other Asian nations to disconnect from the United States and align future geopolitical and socioeconomic strategies with China.
America has been busy projecting strength in regions around the world.  In Eastern Europe it has taken the form of a NATO buildup along Russia’s borders.  In the Middle East it has been injected into the Islamic groups, both terrorists and rebels, attempting to overthrow the Syrian government and re-take Iraq.  In the South China Sea it has been expressed by maintaining a naval presence in opposition to the Chinese man-made islands.  And in the East China Sea American power is justified by the tension between South Korea and North Korea.

In all areas American power is being challenged by the emerging powers.  The alliance between Russia, China, Iran, Syria, and growing to include India, the Philippine’s, and soon Vietnam and other ASEAN members, will be the final catalyst to force the American establishment to back down and align with the larger multilateral mandates.

The world will have to turn against the United States at the same time the existing American establishment is overthrown domestically.  The ongoing election drama between Clinton and Trump is reflective of this internal power struggle.  The international banking interest which now desire a multilateral framework, as opposed to a unipolar framework, are externally pushing back against the American establishment around the world.  At the same time Trump is attempting to take control of the establishment’s power base internally.

How far the American establishment is willing to go in order to stay in control of a world which no longer wants its hand holding will have to be seen.  At some point the power base supporting the America establishment will shift and the fragmentation process will take place.  There is no doubt that the next few weeks and months represent a danger zone and a period of elevated risk.

The move by the Philippines will be the first among many such moves in the region.  The larger Eurasian Union and ASEAN+3 mandates will override all American strategies and new trade agreements will be made.

Vietnam is one such nation which will eventually follow the Philippines and re-negotiate its relationship with the United States.  They have openly expressed in the past the need to end the currency peg with the dollar and peg to the currency of their largest trading partner, which is China.  They have also suggested that they could peg the dong to a basket of currencies.  This could be a reference to the SDR but is more likely a reference to the Asian Currency Unit.

The whole region acts as an optimum currency area.  Europe also serves as an optimum currency area, which provided the basis for the European Currency Unit, a currency basket which later became the euro currency.

As such, the optimum Asian area will develop an Asian Currency Unit.  The Vietnamese dong will end the decade’s long peg to the US dollar and maintain multiple pegs with the Asian Currency Unit and the Chinese renminbi.  This will begin the process of dong appreciation which will align with the larger ASEAN+3 trade agreements and geopolitical relationships.

The European Union will eventually join the Asian Union as members of the larger Eurasian Union.  Each individual region will develop currency units which will be sequentially integrated within the larger macro currency baskets.  The end objective is to consolidate piecemeal all regions and currencies in to the SDR basket.  The SDR, decades from now, will be transformed into a true international currency.

This is the logical path forward on global economic and financial consolidation.
The statement “America has lost” is loaded with intrigue and intent.  It is sending a message to both the American establishment and other nations around the world. The message is straight forward.  The time is now to fight back against the American establishment.  The first major transition point of the global transformation is about to take place.  Please have a seat everyone.  This is about to get interesting.  – JC

By JC Collins
10/21/2016