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For Russia, Change Comes SWIFTly

Russia’s SPFS will gain clients across Iran, Turkey, China and the rest of its close trading partners.

The Duran

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Authored by Tom Luongo:


During the ruble crisis of 2014/15 Russia announced in the wake of U.S. and European sanctions over reunifying with Crimea that it would begin building a domestic electronic financial transfer system, an alternative to SWIFT.

That system, System for Transfer of Financial Messages (SPFS), is not only now functioning in Russia, according to a report from RT it now handles the financial transfer data for more than half of Russia’s institutions.

According to Anatoly Aksakov, head of the Russian parliamentary committee on financial markets:

The number of users of our internal financial messages’ transfer system is now greater than that of those using SWIFT. We’re already holding talks with China, Iran and Turkey, along with several other countries, on linking our system with their systems,” Aksakov said.

“They need to be properly integrated with each other in order to avoid any problems with using the countries’ internal financial messaging systems.”

This is a follow up to last month’s boast by the Russians that their system was seeing a lot of international interest.  How much of this is boast and how much of it is reality remains to be seen, but the important point here is that the minute the U.S. weaponized SWIFT for use in its foreign policy, something like this was bound to occur.

China has its own internal system.  And other countries are building theirs as well.

The SWIFT Cost

A common theme on this blog is that control is an illusion.  Power is ephemeral.  The best way to exercise your power is to have it but never use it.  Because once you do use it you define for your enemies the costs of their lack of compliance to your edicts.

And if there is one thing humans are good at it is responding to known incentives.  Once we can calculate the cost of one behavior over another we can then decide which one is more important to us.

Once costs of staying in SWIFT rise above the benefits of building your own alternative, you build an alternative.

SWIFT is a market power similar to a CEO having billions in restricted stock in their company.  A lot of hay is made about the net worth of people like Jeff Bezos and Mark Zuckerberg.

Quoting their net worth by multiplying their known holdings times the current price of the stock is useless.  Because they can’t sell it.  It is market power or perceived wealth that evaporates the moment they signal to the market their intention to sell.

In reality, if they tried to sell their stock all at once the value of the stock would plummet as buyers would run for the hills and they would realize far less than their stated net worth before the selling began.

So, if anything they are a captive of their own success, needing to manage the creation carefully to avoid damaging its reputation, market position and, ultimately, its business.

SWIFT is a monopoly system, a monopoly born of convenience and inertia thanks to it being neutral to whims of international political spats.  Enter the late stage of imperial thinking in the U.S. where our control over world affairs is waning first in the hearts and minds of various people around the world and then in policy and you have the beginning of the end of SWIFT as the only international financial transfer system.

Back in 2010, I remember Jim Sinclair banging his shoe on the table about our threatening Switzerland over opening up its customer data looking for ‘tax cheats’ under FATCA.  He said then that the Obama administration was idiotic for doing this.

This is where I got the maxim, once you go nuclear you have no other option.

And he was right.

Then Iran was cut out of SWIFT in 2012 to effect regime change which also failed.  And that woke the world up to the reality.  The U.S. and Europe will attempt to destroy your livelihood if you dare oppose its unilateral demands.

Our political and financial elites, The Davos Crowd, will stop at literally nothing to ensure your compliance.

Too bad that SWIFT is just code.  It’s just an encrypted messaging system.  And like the push to stifle alternative voices on social media – de-platforming Alex Jones and Gab for examples – the solution to authoritarian control is not fighting fire with fire, but technology.

And that’s exactly what Russia has done.  They applied themselves, spent the money and wrote their own code.  Code is, after all, hard to control.

De-coding SWIFT’s Power

It is also what is happening all over the Internet communications supply chain right now.  The infrastructure independent content producers need to resist corporate control is being built and will see their businesses rise as so many more people are now woke to the reality of the situation.

As Russian banks and businesses reap the benefits of no longer existing under SWIFT’s Sword of Damocles, others will see the same benefits.

I’ve been making this point all year, the more the Trump administration uses tariffs and sanctions to achieve its political goals the more it will ultimately weaken the U.S.’s position worldwide.  It won’t happen overnight.

It will build, gradually, steadily until one day the threat will no longer be there.

We may have already reached that moment as President Trump has ruled out pressuring SWIFT to cut Iran out of the system.  Too bad his evil Treasury Secretary Steve Mnuchin doesn’t agree with him.

But, Mnuchin is living in the past, he doesn’t respect the resistance that’s forming to U.S. financial hegemony.  He will though when it proves ineffectual.

Russia’s SPFS will gain clients across Iran, Turkey, China and the rest of its close trading partners.  This will accelerate the de-dollarization of Russia’s main trade, hydrocarbons, since many of these countries are major buyers of Russian oil.

When you hear the announcement from a German bank under sanctions from the U.S. for trading in Russian energy that it will use SPFS as its transfer system, that will be the real wake up call to the markets.

Change then will comes, forgive the obvious pun, swiftly.


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Olivia KrothShaun RameweSlavonacjohn vieiraVince Dhimos Recent comment authors
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Zviad Gamsakordia
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Zviad Gamsakordia

The world needs to have a secure banking/monetary transfer system that is independent of any country big or small. Otherwise bigger countries would enslave smaller ones using nasty practices such as sanctions and monetary blockades.
this will send a signal to the US and its allies that enough is enough.

Ruca
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Ruca

Good for you Russia

Normski
Member
Normski

Necessity is the mother of invention!.

Guy
Member
Guy

Pun forgiven as it is so appropriate in light of the result of bullying .Trump is going to learn through the school of hard knocks ,that international politics is not the same as building golf courses .

Vince Dhimos
Guest

So far the only obstacle is the failure to find a Eurpean host for the SWIFT replacement.

john vieira
Guest

If attitudes do not change a European host will be found. Social media is about to get their comeuppance also as many people are not to happy with their “censorship” drive and alternatives WILL be sought out…

Slavonac
Guest
Slavonac

Yet again we find proof that no matter which president, US does not change its international politics of sanctions, regime change and war against those who do not comply with “you are either with us or against us”. The recent UN resolution on US Cuba embargo seem to have not been understood by the powers behind the Union of States. 189 against 2 countries openly rejected the US foreign policies and left the US nearly alone against the whole World and what did the US do? promising more of the same policies! The same can be expected with the SWIFT… Read more »

Shaun Ramewe
Guest
Shaun Ramewe

That’ll tie a knot in the ZioYank sicko [email protected]’ devil tails!!

Olivia Kroth, author and journalist
Member

The Russian Government is working very carefully to ameliorate and sustain its position on the global markets. No harsh moves to be expected here.

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BREXIT chaos, as May’s cabinet crumbles (Video)

The Duran Quick Take: Episode 18.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at the various scenarios now facing a crumbling May government, as the Brexit Withdrawal Agreement is forcing cabinet members to resign in rapid succession. The weekend ahead is fraught with uncertainty for the UK and its position within, or outside, the European Union.

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If Theresa May’s ill-fated Brexit Withdrawal Agreement is eventually rejected this could trigger a vote of no confidence, snap elections or even a new referendum…

Here are six possible scenarios facing Theresa May and the UK (via The Guardian)

1 Parliament blocks Theresa May’s draft withdrawal agreement and political declarations

May faces an enormous task to win parliamentary approval, given that Labour, the SNP, the DUP and 51 Tories have said they will not vote for it.

If the remaining 27 EU member states sign off the draft agreement on 25 November, the government will have to win over MPs at a crucial vote in early December.

If May loses the vote, she has 21 days to put forward a new plan. If she wins, she is safe for now.

2 May withdraws the current draft agreement

The prime minister could decide that she will not get the draft agreement through parliament and could seek to renegotiate with the EU.

This would anger Tory backbenchers and Brussels and would be seen as a humiliation for her government. It might spark a leadership contest too.

3 Extend article 50

May could ask the European council to extend article 50, giving her more time to come up with a deal that could be passed by parliament – at present, the UK will leave on 29 March 2019.

Such a request would not necessarily be granted. Some EU governments are under pressure from populist parties to get the UK out of the EU as soon as possible.

4 Conservative MPs trigger a vote of no confidence in the prime minister

If Conservative MPs believe May is no longer fit for office, they could trigger a no-confidence vote.

Members of the European Research Group claim that Graham Brady, the chair of the powerful 1922 Committee, will receive the necessary 48 letters this week.

A vote could be held as soon as early next week. All Tory MPs would be asked to vote for or against their leader. If May wins, she cannot be challenged for at least 12 months. If she loses, there would be a leadership contest to decide who will become prime minister.

5 General election – three possible routes

If May fails to get support for the current deal, she could call a snap general election.

She would table a parliamentary vote for a general election that would have to be passed by two thirds of MPs. She would then set an election date, which could be by the end of January.

This is an unlikely option. May’s political credibility was severely damaged when she called a snap election in 2017, leading to the loss of the Conservative party’s majority.

Alternatively, a general election could be called if a simple majority of MPs vote that they have no confidence in the government. Seven Tory MPs, or all of the DUP MPs, would have to turn against the government for it to lose the vote, triggering a two-week cooling-off period. May would remain in office while MPs negotiate a new government.

Another route to a general election would be for the government to repeal or amend the Fixed-term Parliaments Act which creates a five-year period between general elections. A new act would have to be passed through both the Commons and the Lords – an unlikely scenario.

6 Second referendum

May could decide it is impossible to find a possible draft deal that will be approved by parliament and go for a people’s vote.

The meaningful vote could be amended to allow MPs to vote on whether the country holds a second referendum. It is unclear whether enough MPs would back a second referendum and May has ruled it out.

 

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Brexit Withdrawal Agreement may lead to Theresa May’s downfall (Video)

The Duran – News in Review – Episode 151.

Alex Christoforou

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The Brexit Withdrawal Agreement has been published and as many predicted, including Nigel Farage, the document is leading to the collapse of Theresa May’s government.

During an interview with iTV’s Piers Morgan, remain’s Alistair Campell and leave’s Nigel Farage, were calling May’s Brexit deal a complete disaster.

Via iTV

Alastair Campbell: “This doesn’t do remotely what was offered…what is the point”

“Parliament is at an impasse”

“We have to go back to the people” …”remain has to be on the ballot paper”

Nigel Farage:

“This is the worst deal in history. We are giving away in excess of 40B pounds in return for precisely nothing. Trapped still inside the European Union’s rulebook.

“Nothing has been achieved.”

“In any negotiation in life…the other side need to know that you are serious about walking away.”

“What monsieur Barnier knew from day one, is that at no point did Theresa May intend to walk away.”

“Fundamental matter of trust to the electors of our country and those who govern us.”

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss Theresa May’s Brexit Withdrawal Agreement, and why the deal is a full on victory for the European Union and a document of subjugation for the United Kingdom.

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Follow The Duran Audio Podcast on Soundcloud.

Coming in at 585 pages, the draft agreement will be closely scrutinized over the coming days but here are some of the highlights as outlined by Zerohedge

  • UK and EU to use the best endeavours to supersede Ireland protocol by 2020
  • UK can request extension of the transition period any time before July 1st, 2020
  • EU, UK See Level-Playing Field Measures in Future Relationship
  • Transition period may be extended once up to date yet to be specified in the text
  • EU and UK shall establish single customs territory and Northern Ireland is in same customs territory as Great Britain

The future relationship document is less than seven pages long. It says the U.K. and EU are seeking a free-trade area with cooperation on customs and rules: “Comprehensive arrangements creating a free trade area combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition.”

The wording might raise concerns among Brexiters who don’t want regulatory cooperation and the measures on fair competition could amount to shackling the U.K. to EU rules.

As Bloomberg’s Emma Ross-Thomas writes, “There’s a clear sense in the documents that we’re heading for a customs union in all but name. Firstly via the Irish backstop, and then via the future relationship.”

Separately, a government summary of the draft agreement suggests role for parliament in deciding whether to extend the transition or to move in to the backstop.

But perhaps most importantly, regarding the controversial issue of the Irish border, the future relationship document says both sides aim to replace the so-called backstop – the thorniest issue in the negotiations – with a “subsequent agreement that establishes alternative arrangements for ensuring the absence of a hard border on the island of Ireland on a permanent footing.”

On this topic, recall that the U.K.’s fear was of being locked into the backstop arrangement indefinitely in the absence of a broader trade deal. The draft agreement includes a review process to try to give reassurance that the backstop would never be needed. Basically, the U.K. could choose to seek an extension to the transition period – where rules stay the same as they are currently – or opt to trigger the backstop conditions. In fact, as Bloomberg notes, the word “backstop,” which has been a sticking point over the Irish border for weeks, is mentioned only once in the text.

As Bloomberg further adds, the withdrawal agreement makes clear that the U.K. will remain in a single customs area with the EU until there’s a solution reached on the Irish border. It’s what Brexiteers hate, because it makes it more difficult for the U.K. to sign its own free-trade deals, which they regard as a key prize of Brexit.

Predictably, EU Commission President Juncker said decisive progress has been made in negotiations.

Meanwhile, as analysts comb over the documents, Jacob Rees-Mogg, chairman of the European Research Group, has already written to Conservative lawmakers urging them to vote against the deal. He says:

  • May is handing over money for “little or nothing in return”
  • The agreement treats Northern Ireland differently from the rest of the U.K.
  • It will “lock” the U.K. into a customs union with the EU
  • It breaks the Tory election manifesto of 2017

The full document…

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4 resignations and counting: May’s government ‘falling apart before our eyes’ over Brexit deal

The beginning of the end for Theresa May’s government.

The Duran

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Via RT


Four high profile resignations have followed on the heels of Theresa May’s announcement that her cabinet has settled on a Brexit deal, with Labour claiming that the Conservative government is at risk of completely dissolving.

Shailesh Vara, the Minister of State at the Northern Ireland Office was the first top official to resign after the prime minister announced that her cabinet had reached a draft EU withdrawal agreement.

An hour after his announcement, Brexit Secretary Dominic Raab – the man charged with negotiating and finalizing the deal – said he was stepping down, stating that the Brexit deal in its current form suffers from deep flaws. Esther McVey, Secretary of State for Work and Pensions, submitted her letter of resignation shortly afterwards. More resignations have followed.

Labour’s shadow Cabinet Office minister, Jon Trickett, predicted that this is the beginning of the end for May’s government.

The government is falling apart before our eyes as for a second time the Brexit secretary has refused to back the prime minister’s Brexit plan. This so-called deal has unraveled before our eyes

Shailesh Vara: UK to be stuck in ‘a half-way house with no time limit’

Kicking off Thursday’s string of resignations, Vara didn’t mince words when describing his reservations about the cabinet-stamped Brexit deal.

Theresa May’s EU withdrawal agreement leaves the UK in a “halfway house with no time limit on when we will finally become a sovereign nation,” his letter of resignation states. Vara went on to warn that the draft agreement leaves a number of critical issues undecided, predicting that it “will take years to conclude” a trade deal with the bloc.

“We will be locked in a customs arrangement indefinitely, bound by rules determined by the EU over which we have no say,” he added.

Dominic Raab: Deal can’t be ‘reconciled’ with promises made to public

Announcing his resignation on Thursday morning, Brexit Secretary Dominic Raab tweeted: “I cannot in good conscience support the terms proposed for our deal with the EU.”

Raab claimed that the deal in its current form gives the EU veto power over the UK’s ability to annul the deal.

No democratic nation has ever signed up to be bound by such an extensive regime.

Former Conservative Party leader Iain Duncan Smith said that Raab’s resignation as Brexit secretary is “devastating” for May.

“It sounds like he has been ignored,” he told the BBC.

Raab’s departure will undoubtedly encourage other Brexit supporters to question the deal, political commentators have observed.

Esther McVey: Deal ‘does not honor’ Brexit referendum

Work and Pensions Secretary Esther McVey didn’t hold back when issuing her own letter of resignation. According to McVey, the deal “does not honour” the result of the Brexit referendum, in which a majority of Brits voted to leave the European Union.

Suella Braverman: ‘Unable to sincerely support’ deal

Suella Braverman, a junior minister in Britain’s Brexit ministry, issued her resignation on Thursday, saying that she couldn’t stomach the deal.

“I now find myself unable to sincerely support the deal agreed yesterday by cabinet,” she said in a letter posted on Twitter.

Suella Braverman, MP Parliamentary Under Secretary of State for the Department for Exiting the EU © Global Look Press / Joel Goodman
Braverman said that the deal is not what the British people voted for, and threatened to tear the country apart.

“It prevents an unequivocal exit from a customs union with the EU,” she said.

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