Ever since the end of World War II, Japan has been little more than a vassal state for Washington, and all one has to do is look at a recent financial scheme in which the Far Eastern economy sold out its own people to the U.S. by allowing all their pension funds to be replaced with dollar based Treasuries.
Yet even as Koruda and Abe raise their hands in salute to their Western masters in most things financial, one policy that the U.S. has imposed upon the world is forcing Japan to re-evaluate their own programs and it may be beginning with their trade agreements they have with Russia.
Japan Bank for International Cooperation (JBIC) is turning to currency swaps as using the US dollar in transactions is difficult because of the Western anti-Russia sanctions, the bank’s senior managing director said answering a question from Sputnik.
“We’re now studying that [the effects of ruble devaluation]. We need some of the swap arrangements with the local banks. We are elaborating opportunities with Russian banks such as Gazprombank, VTB, VEB… Because of the US sanctions, we cannot use the US dollar anymore, we have to switch to other currencies,” Tadashi Maeda said on Thursday, speaking after a conference at the Eastern Economic Forum (EEF) in the Russian city of Vladivostok. – Sputnik News
Use of sovereign currencies for trade outside the dollar has been increasing over the past seven years when the U.S. chose to devalue the global reserve by lowering interest rates to near zero, and instituting a series of money printing programs known as Quantitative Easing. And one of the consequences of these policies has been the exporting of inflation, and the need for countries outside the U.S. to devalue their own currencies which has resulted in a global currency war.
Russian trade with Japan has increased since 2012, and makes up 3.7% of their total annual imports and exports. However, this is expected to increase even more as the energy giant seeks new markets to replace what has been lost by their counter sanctions against Europe due to their primary trade partners standing lock-step with America.
The world is heading towards the end of a singular global reserve currency and back to bi-lateral trade where each nation uses its own currency to facilitate that trade. And since Russia along with China are both in the final stages of creating their own SWIFT type systems, now may be the time for Japan to get on board with the paradigm shift occurring in both Asia and Eurasia, and divest their reliance on U.S. and dollar hegemony.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.