Keeping the Creditor Nations Divided

Economics, Geopolitical, Premium POM10 Comments

China, the Paris Club and Sovereign Debt Restructuring

There are three core solutions which can be used to address sovereign debt.  The first are Collective Action Clauses (CAC’s).  The second is the Sovereign Debt Restructuring Mechanism (SDRM) of the International Monetary Fund (IMF).  The third consists of agreements and processes as negotiated within the Paris Club.

Over the last 4 years we have covered both CAC’s and the SDRM, but have only touched on the Paris Club in a few articles.  The Club is comprised of the world’s creditor nations.  These “creditor” nations are China, Malaysia, Russia, Japan, Germany, South Korea, Taiwan, Netherlands, Belgium, Israel, Switzerland, Hong Kong, Denmark, Norway, Singapore, Australia, France, Italy, Spain, Sweden, and Luxembourg.

While China, Japan, and Germany are the top creditor nations, the list of Paris Club members does not fully align with the monetary realities. America is included as an influential member of the Paris Club. The United States is of course a debtor nation and shouldn’t be a part of the Paris Club based on the membership criteria, but holding the international reserve currency provides a big stick.

Additionally, the other factor which is important to understand is that China, the largest of the creditor nations, is not a member of the Paris Club.  It has been kept out for numerous reasons, but none as prominent as the fact that it holds the largest amount of US debt outside of the Federal Reserve.

When we consider that the purpose of the Paris Club is to provide a platform for creditor nations to discuss the debt of debtor nations, and possible debt restructuring solutions, the reason for China’s exclusion becomes more understandable.

Discussions have been taking place to bring China into the Paris Club but it hasn’t happened yet.  The relationship is getting closer as the other creditor nations realize that no substantial and sustainable debt restructuring can take place without China playing a role.

There are at times ad hoc participants who are invited into select meetings and discussions.  These would include the People’s Bank of China, Turkey, and Middle Eastern representatives from Kuwait and Abu Dhabi.

Then there are the observer attendees who can watch the negotiations but not directly participate.  These are global institutions such as the IMF, World Bank, Organization for Economic Co-Operation and Development, United Nations Conference on Trade and Development, European Commission, African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, and the Inter-American Development Bank.

Absent form this list of course are the BRICS Development Bank and the Contingent Reserve Arrangement.  It can be assumed that as China gains membership into the Paris Club these institutions will be invited along as observers.

Russia is a member and has strong alliances with China.  The development of the Eurasian Economic Zone will strengthen trade and monetary agreements between both those nations, but will also draw other Paris Club (creditor nations) into expanded alliances with both Russia and China.

Such a situation would see the composition of the Paris Club shift and the largest of the creditor nations would begin to align against the interests of the United States, and in turn Great Britain.  Considering that America is the largest of the debtor nations, but carries the biggest stick in the Paris Club, it is highly probable that the Anglo-American interests are attempting to prevent this shift from happening.

The complexity of the multilateral monetary transition comes into clearer focus when we factor in information such as discussed in this post.  The Anglo-American interests are attempting to strengthen their negotiating position through geopolitical maneuvering, international monetary and legal agreements, as well as cornering and segmenting off resource regions, trade routes, shipping lanes, and capital flows, before allowing any fundamental transformation of the US dollar.

It’s all about negotiating from a position of strength and not weakness.

The list of nations in the Paris Club includes a high percentage of those who are experiencing massive migration from the third world and the subsequent social instability which follows.  Terrorism and other methods of fragmentation are being used to influence and forever change the demographic of these nations.

The objective of such a strategy is broad and would include multiple outcomes and end results.  The migration which is taking place is predominantly of Sunni Muslims.  As we are discussing in other articles, Sunni Islam has been at odds with Russia and Shiite Iranian/Persian culture for a long time.  The Sunni terrorism which is happening around the world is reshaping the geopolitical landscape to make alliances between these nations much more difficult.

When sovereign debt restructuring begins it will most likely be through a combination of the SDRM, CAC’s, and the Paris Club.  Already the IMF has strong relations with the Paris Club and the multilateral world is shifting regardless of the delays and tactics of the Anglo-American interests.  These are fascinating times to research and analyze for sure.  – JC

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JC Collins can be contacted at jcollins@philosophyofmetrics.com

10 Comments on “Keeping the Creditor Nations Divided”

  1. “The Club is comprised of the world’s creditor nations. These nations are China…”

    “…the other factor which is important to understand is that China, the largest of the creditor nations, is not a member of the Paris Club.”

    I’m confused. What am I misunderstanding?

    1. The Club is comprised of the worlds creditor nations. These nations (creditor nations) are China…. China is the only creditor nation which isn’t a part of the Paris Club. The wording is a little confusing. I’ll add a note to it. Thanks.

  2. I’m reading “Banking on Baghdad – inside Iraq’s 7000 Year History of War, Profit, and Conflict” by Edwin Black right now. His historic research along with your expose paints an obvious picture of trade routs and control of resources as being the major factor for societal control and development.

    Interestingly, the control of resources like oil and transport in the Mesopotamia area is much easier to determine than ownership.

    I’m saddened to read about human nature’s insatiable thirst for control and sadistic bloodlust in the Middle East, especially among brothers (Sunni and Shi’ia) and how decimated those areas have been since the birth of Islam. It was like that ideology and hatred toward European “infidels” set their society and pattern of enlightened thought back to the Stone Age and kept it there for many ppl living in the ME.

    I would think, if America or other interests were not in the area, they would still be no better off due to their built in ideological conflicts.

    1. Dear DeeJJ,

      As a person born in Iran, I would like to make a comment regarding what you stated :

      “I’m saddened to read about human nature’s insatiable thirst for control and sadistic bloodlust in the Middle East, especially among brothers (Sunni and Shi’a) and how decimated those areas have been since the birth of Islam. It was like that ideology and hatred toward European “infidels” set their society and pattern of enlightened thought back to the Stone Age and kept it there for many ppl living in the ME.”

      I think what seems to be happening here is this. The predominantly Shia Iran that is an Indo-European people, Language, mythology etc. is in an ancient conflict with the Semitic ideology ever since the first Arab invasion and the forced conversion of Persia in the 7th century. Whilst the rest of the region is predominantlyIslam practices the mainstream Islam i.e. Sunni Islam.

      The Arabs are a Semitic people and belong to the same people group genetically and ideologically as the Jews. In this way, the two people that you mentioned are in no way can be called “Brothers”. If anything, Iranians who are predominantly Shia (98 percent) have gone their own way since the 16th century and away from the mainstream Islam’s control which the Ottoman’s were its guardians. I am afraid people in the west simply do not understand who is who in that region and that seems to go as far and up into the US State Department too. Arab Leaders particularly of Saudi Arabia to this day, call Iranians, Infidels (Safavid Fire Worshippers) referring to the Safavid dynasty 15 century of Iran and the Indo-European belief of Iranians before the Arab invasion of Persia which saw the Sun as the symbol of the suprem-being belonging to the Aryan barnch of the Indo-European civilization.

      However, I agree with you that Islam since ints inception which to this day is a highly debated subject, although not allowed by its new Guardians, the Left, and the Globalists, since this religion does not have any central authority and no person is answerable regarding its conducts and even the jurisprudence aspects. What our JC has been talking in occasions, is the idea of reformation which is a must. However, it will only happen if the old Colonial powers who have controlled the region since WWI (Great Britain) to let go of their minions (Muslim Brotherhood), as well as by annihilating what we know today as “Islamic Terrorism”.

      Please consider this, that Europeans for the past 1000 years at least have been fighting large scale wars in average, every three years! War is, unfortunately, an inherent attribute of our species and regardless where we come from, whether the darkest Africa, the Near East or the South of France region. The entire warfare is over one thing alone, Control of resources and religion is an excuse. The last 100 years we have had wars with a religion that is atheistic, that is Marxism.

      President Trump in his inaugural speech said “Islamic Terrorism Must end…” which is almost an identical call that the late and noble President Reagan said to Gorbachev, “Mr. President, bring this wall down”. Trump is the only president who confronted the British deep state regarding their control of the Islamic world through Freemasonic cults such as the Muslim Brotherhood. Islamists and their Western backers will submit or they will be annihilated.

      1. Dear Carpe Diem,

        Maybe you have made some suggestions in the past, but are there any books you would recommend that give a good history up to the present day of the Arabic and Persian Middle East? Something that maybe ties in India, Europe, and the United States? I am currently reading The Third Way by Joseph P. Farrell and it does talk about Germany’s ties to the Ottomans and that it was the Germans under Kaiser Wilhelm that implemented a policy of jihad in the Middle East to use against the British there. Any suggestions would be greatly appreciated. Preferably a book that is not too thick and flows nicely that gives the broad strokes of the history, if that is possible. I suppose even a good blog recommendation would be nice too.
        Thanks,
        Mark

        1. Good Morning Dear Mark,

          I am a huge fan of Dr. Joseph Farrell and the Germans and the Ottomans as well as using Islam as a preferred weapon to control the vast and rich region. The prominence of the Arabs as a people is the choice the British made through their Masonic control of the Mullahs and Muftis. The period of history for Islamic colonization of the mid-East is beginning of the 7th century to this day. Before that, we have the Persian empire that ruled the region for many centuries whose states religion was predominantly Zoroastrian which is an Indo-European belief system and totally in contrast with Islam that is a Semitic belief system and many believe Islam to be a franchise of Judaism historically, ritually as well as other aspects. I will include books and blogs later today or tomorrow.

          In the meantime, the excellent lectures by Profesor Sheda Vasseghi cover the Pre-Islamic Persia I would recommend. She has several lectures using the interactive Prezi format, you can search for them all.

          https://prezi.com/edmy9q7k_xyj/lecture-1-terminology-identity-iranian-lineage-in-asia/

          1. Hi Mark,

            My sincere apologise for the first paragraph in my last reply which now reading it, makes little sense! What I should have said, had I been more careful, would have been:

            “I am a huge fan of Dr. Joseph Farrell and [it is true that] the Germans and the Ottomans used Islam as a preferred weapon to control the vast and rich region [along with the British ever since].”

            The problem is that there are only a handful of reliable books that provide an unbiased report of the geopolitics, culture, and history of the region we are talking about. What seems to have happened after WWI, is that the Arabization (Islamophilia) of the Western geopolitical classes and academia as well as the Foreign Office, State Depts. If you find any modern college history 101, they begin the history of the Near East with something like this, “life in the region began with Arabs and Islam…”. This is an indication of the scale of the problems and falsification of history and why there is so much confusion in the West in relation to the region. Marginalization of a whole host of ancient people who lived in this region forever, namely the Kurds, Persians (an Iranian people), Jews, Christians, Assyrians, Mandaeans, Yezdi’s, Zoroastrians and many many other clans and people that are now collectively referred to as Arabs which is a way the British and the French after WWI decided to culturally and historically delete all these people and call them all as Arabs!

            In any case, this is a problem and a sincere truth seeker will find his/her truth by simply looking at multiple and available sources.

            The other problem is that there is no single book that you can find that will put as you put it, “Arabic, Persian, India, Europe and the United States” in one book. What is missing is the explanation regarding the historical, religious, cultural and the connections between these nations and peoples.

            I would recommend the following blogs by various historians as follows”

            http://kavehfarrokh.com/blog/
            Dr. Kaveh Farrokh is also fascinating from many different angels that encompass, history, culture, geopolitics and much more.

            https://www.facebook.com/The-Official-Site-of-Sheda-Vasseghi-145291692218257/
            Professor Vasseghi’s Facebook contains over 2000 postings about Persia and her role in the current world from historical, political and philosophical perspective. Her website will keep any reader occupied and amazed with stunning revelations of the hidden history of Iran and Iranian civilization that spans some 7000 years.

            http://www.iranicaonline.org/
            This is an excellent source and is a very comprehensive work that is still undergoing research by an international group of scholars in the US.

            https://en.wikipedia.org/wiki/Richard_N._Frye
            Any book or publication by the late Professor Richard Frye (he requested to be buried in Isfahan, Iran next to the American Iranologist Arthur Pope by the ancient river Zayandeh-rood and was refused by the Islamic Republic goons!)

            https://en.wikipedia.org/wiki/Mary_Boyce
            Any book or publications by the late Professor Mary Boyce the English world-class expert on Zoroastrianism and ancient Iran.

            http://www.cais-soas.com/CAIS/Languages/iranian_languages.htm
            The Circle of Ancient Iranian Studies, the website also contains many fascinating article and items in relation to Iran’s history, Zoroastrianism, Language and Culture of Ancient Iran.

            https://en.wikipedia.org/wiki/The_Cambridge_History_of_Iran
            This one is a series of books printed by the CAnbridge University and it is possibly the most reliable source with great details.

            I hope this list will help Mark. Wish you a great afternoon.

  3. Thank you Carpe Diem. It seems like a wealth of knowledge you have listed here and when I get some free time I will dive into the material. I really appreciate you taking the time to help enlighten me and everyone else who reads your posts.
    Thanks again,
    Mark

    1. You are most welcome Dear Mark and I learn from you and everyone on POM every day. I think this is an exciting time to be alive in the sense that, we are all finding things out together and there is a sense of unity in people of different walks of life trying to unravel the mystery of our collective history as a species.

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