13 Jun The Column of Miguel Ángel, June 2020
Are we heading towards a New World Order?
Control of the world has gone from being a military issue to a financial issue. Monitoring the world’s leading bank intercom system, SWIFT, and control of Wall Street, the world’s number one stocks market, gives Americans a global dominance that the Chinese want to topple. With absolute control of Hong Kong, the main Asian stock market and a new cryptocurrency issued by the Chinese Central Bank, a silent war for a new world order has begun. With absolute control of Hong Kong, the main Asian stock market and a new cryptocurrency issued by the Chinese Central Bank, a silent war for a new world order has begun.
By Miguel Ángel Temprano
CEO Orfeo Capital
June 16th, 2020
Reading time: 9 min.
Humanity has lived in constant war. First, wars between tribes, then between countries and finally wars between continents. Humans do not know how to live without fighting between themselves. At the time of writing of this article, the organization UNHCR reports six countries at war with extensive population displacement: Yemen, Iraq, Syria, South Sudan, Somalia and Afghanistan. But to these we could add other conflict zones such as Palestine or the Sahel.
And despite this, we can say, without failing to the truth, that the world is living the longest period of peace in the history of humanity, which has allowed an unprecedented technological development to date.
So, should we ask ourselves if man has been pacified? There would certainly be reasons to ask ourselves this question, but the answer would always be “no”.
The craving for power and control over others is, at the very least, at the same level as it has been ever before. Humans have not changed at all, it is only that civilization and in particular technology, has allowed us to carry out these wars in other areas, almost as bloody as the previous ones, albeit now the ground is not stained red.
“The Third World War is a silent war, a white glove war, and it is waged on a battlefield that hurts the most besides physical wounds, the economic one.”
Let us take a look at History. In the Second World War, once the Germans had been defeated and Europe had been liberated from the Nazis, the Allies gathered at a hotel in the United States, in the state of New Hampshire, called Bretton Woods, with the purpose of establishing a New World Order. Politicians were aware that the trigger for the Nazi’s rise to power was the draconian conditions imposed in the Treaty of Versailles to compensate the Allies for the damage caused by the Germans in the First World War.
The World Order had to be reestablished and the boss, the United States, was the one to do it.
The Bretton Woods Agreement created institutions that have proven to be key even in the current days, such as the World Bank or the International Monetary Fund, but above all they did something much more important, they recognized the United States as the predominant country for the vast majority of the planet, by setting its currency, the USD, as the reference currency for the rest of the world. Its value was linked to the value of gold, and all other currencies were linked to the USD.
This system, which was called the “gold standard”, was valid until the next war, this time the Vietnam war, which exhausted the American reserves and destabilized its trade balance, forcing the reference standard to be abandoned, so that the USA could issue more currency. This led to the exchange system that we now have, that is, a “free” exchange system. But curiously, the dollar remained the reference currency, that is, the currency with which all the other currencies are compared and that which is most used in international transactions.
Curiously, in 1973, almost at the same time as the disappearance of the gold standard, the SWIFT system was created in Brussels -but championed by the Americans- which is the electronic system for bank intercommunication, to which almost 12,000 banks are subscribed in the world, and granted, all those who have or intend to obtain a minimum representation on the planet. This system is the one that allows International Money Transfers. The curious thing about the system is that most transfers require what is called a correspondent bank, that is, a bank that acts as a hub for others, and these are the vast majority of American banks.
Through the SWIFT system, about 1.5 Tn of USD are moved daily (or what is in Spanish terminology 1.5 Bn). To contextualize this magnitude, it would be like moving 1.5 times the wealth generated in one year by the entire Spanish state on a single day.
“The money that moves worldwide every day is equivalent to 1.5 the wealth generated by a country like Spain in a whole year.”
Monitoring the system allows it to be controlled, legal or illegal, moral or immoral, but there are already too many examples described of monitoring by American agencies, such as the NSA.
And knowledge is power, and in this case, we can say that it is infinite power.
Additionally, this immense banking correspondence business generates huge commissions and, thanks to the fact that 3/5 of the correspondent banks are American, they receive 52% of the banking commissions that are generated daily in the world.
All of the above has led to Wall Street becoming an increasingly important financial center, to such an extent, that we could say that it is the only place in the world where large bonds and stocks are traded. In truth, a company does not need to go to New York to issue its negotiable bonds, but just as well, if the company wants these to be made in very significant amounts, it has to be done in Wall Street or it will never succeed. In any case all the “players”, or at least the vast majority, operate actively in it, and they do it under the American legislation, control and jurisprudence.
All this means that the Americans have in their hands a very powerful and very cheap weapon to use when the interest arises, and it is none other than coercion. If they are interested in putting pressure on someone, they only have to prevent them from operating on Wall Street or prevent those who operate with them anywhere in the world from trading there.
The most plausible and clear example is found in Venezuela. The US government has decided to cut-off the sources for financing for the Bolivarian government of Venezuela. First step was to prevent their sovereign bonds from being traded; the second step, those of their companies -mainly their oil companies- and third to prevent those who make any trade agreement, even if it is in another part of the world, with the government of Venezuela.
All said and done.
But in addition to this, they have blocked the accounts of their leaders in the American banks and collaterally have impeded the international movement of their money by preventing American correspondent banks from being used for such movements.
As you can see, power is absolute, and perhaps it is well used, even useful for humanity, because it allows us to fight actively and efficiently against criminals and dictators. But of course, the US is no longer the only boss at the table, now the Chinese are too.
“The second world economic power claims its role at the decision table. The Chinese are no longer going to allow the Americans to be the only guardians in the world.”
Scarcely a decade ago China represented only 3.5% of world GDP, but today it already represents 12.5%, and, depending on who does those estimates, between 2025 and 2030 it will be the world leader per generation of GDP. This is where China does not accept that said situation of American control or, clearly, no-control on its part.
The Euro was born with the idea of being a preponderant currency, but everything became an illusion. In the same way, the Yuan is also an irrelevant currency in the international market. All international purchases and sales in China are made in USD and the situation of loss of control reaches its highest point when the largest company by market capitalization -TENCENT- is obliged to be listed, in addition to its reference market, Hong Kong, in New York. Quite an insult to Chinese pride.
The financial place par excellence of the Asian market has always been Hong Kong. Moreover, the one that was for many years the main English international bank, had and still has an Asian name, HSBC (Hong Kong, Shanghai Bank Corporation), because it was born there.
“Technology and controlling Hong Kong are going to allow China the global preponderance it seeks.”
China wants to control Hong Kong, and surely their pride is to blame, but as much or more than this, the intention of controlling it financially is the main reason. But controlling this financial landmark is only the beginning, as they have to attack the USD status quo and this is where technology comes to their rescue.
I have defined money as an intermediate exchange asset, which to be usable as such, must meet two requirements: one is to be stable, and the other is to be issued by a body or estate that provides the necessary trust by providing the last resort guarantee. If to these two we could add the security provided by blockchain technology, the resulting cocktail will be perfectly prepared.
A currency with blockchain technology issued by the Chinese central bank, meets all the above requirements, and will manage to get out of control of the SWIFT system, which currently subdues the Chinese to the Americans.
Well, it is already here! At the moment it’s called DCEP (Digital Coin Electronic Paid).
They are definitely not interested in breaking the status quo in Hong Kong yet, because they have tried mounting a replica in Shanghai and have not succeeded. We will see other Chinese attempts at financial control of the Stock market in many areas. They will do it with patience, especially while their currency gains more and more weight, just do not expect changes in their current roadmap. This writer is sure that they will not move their control positions even one inch.
Much is at stake in this new silent war.