Better in their words…

Regular readers will be familiar with my constant refrain—sorry if I haven’t said this this week—that the current global war is a war to maintain the hegemony of the Anglo-Zionist Empire, which rests on the hegemony of King Dollar as the world’s reserve currency. Russia and China are, from this perspective, existential enemies.

With regard to Russia, the genesis of this perception coincides with the rise of Vladimir Putin. The Anglo-Zionist Empire had seen the collapse of the former Soviet Union and the opening of Russia to plunder by the Anglo-Zionist allied oligarchs inside Yeltsin’s Russia. What changed was the realization that Putin’s Russia would not submit to the Anglo-Zionist Empire looting of Russia and would fight back. You can reread the background at these two posts—keeping in mind that Keir Starmer is a creature of the protagonists in this war on Russia:

Putin’s determination to Make Russia Great Again—and his extraordinary abilities—quickly became apparent after he rose to leadership of Russia. The Clintons’ extension of NATO eastward—a direct threat to Russia—was already a preparation for war on Russia, should that become necessary. The same can be said of Dubya’s Russia policy, which included setting up Georgia and Ukraine as future proxies for use against Russia. Russia’s invasion of Georgia made clear Putin’s understanding of these geopolitical realities, but the Anglo-Zionist involvement in the Middle East and South Asia forestalled a direct or proxy assault on Russia. The assault was forestalled, but not the preparations. And Putin also intensified Russia’s preparations to face down this existential threat.

In a generally similar way, the Anglo-Zionists thought that China could be managed and maintained as a Sweatshop to the World—to the enrichment of the ruling Anglo-Zionist elite. It became popular for the Anglo-Zionist elite to train their children in Mandarin Chinese, in preparation for becoming the ruling elite of China, one assumes. There was a brief love affair with China. But once it became clear that the Chinese would rule China for their own benefit—in other words, probably not later than the first BRIC (i.e., minus South Africa) meeting in 2006—a rethinking of whether it would be possible to manage China began to dawn. That rethinking has risen to the level of alarm, especially after the Anglo-Zionists pushed Russia and China from an economic partnership—already a potentially existential threat to King Dollar’s and Anglo-Zionism’s hegemony—into something very close to an outright military alliance. The rise of the Russian and Chinese militaries sealed the new view.

Please note. It is not my view that BRICS seeks global hegemony. It is my view that the Anglo-Zionist Empire refuses to accede to a multi-polar world, no matter what disinformation may be propagated by the Trump regime (as in NSS25). However, the nature of the Anglo-Zionist Empire requires that King Dollar be dethroned. I don’t think there’s any doubt that Russia and China are in full agreement on this point, but it is only China that can take the lead in that process. This is the currency war that Sean Foo addresses and which he sees coming in 2026. I believe this view is important enough to warrant a full transcript. One important note. I found in preparing this transcript that I needed to clean it up a bit but also I needed to expand some of Foo’s points to make his argument explicit in written form.

Anti-Dollar SHOCK: China’s Digital Currency Just Canceled USD Trade & U.S. Bonds Lifeline

China is wrapping up their plan to displace the dollar from transactions and to roll out their own currency globally. Now, the traditional way to accomplish this would be to strengthen the RMB and start issuing more Chinese bonds. But there is a big sticking point in global trade. The dollar’s dominance is still very prevalent, and that gives the US a lot of bargaining power plus influence in the global economy. It’s this dollar demand that is preventing the US bond market from imploding.

Already you can see reasons for the remarkable aggression of the Trump regime with regard to China. It may not be China’s fault that a role of the RMB in international trade settlements commensurate with China’s role in international trade will likely lead to a US bond bond market implosion and economic disaster for the US—after all, the US finds itself in this situation basically because it allowed the USD to be used as an instrument of Anglo-Zionist imperialism. Nevertheless, if the US is to retain both Anglo-Zionist hegemony and its own leading role within the Anglo-Zionist Empire, then China (and Russia) must be defeated. It’s to the point that it can no longer be plausibly argued that China and Russia can somehow be managed—they must be defeated.

Now, Trump is slowly dismantling “it” [what? dollar dominance? I think that’s “it”], but the Chinese want to accelerate the process. And to be honest, it’s quite an unfair situation when we compare country versus country. The US, for example, has less than 27% of global GDP, but they hold 65% of world currency usage. Their share of global trade in green is even less than China. China on the other hand has a bigger share of world trade and an economy bigger than all of Europe. However, their currency share in international settlements is less than 3%. So there’s a big gap between the dollar and the RMB today [in terms of their relative importance in international trade]. This is the gap that China is trying to close. As long as this persists, there will always be outsized demand for dollars and US debt.

China doesn’t want this to continue. If the RMB gains market share, that would add pressure on the US economy. It would also sanction proof China’s entire economy at the same time. If their trade is done in local currencies, dollar sanctions will have no effect. The US, of course, wants the current system to continue. In 2026, there will be a wall of US debt that needs refinancing. In 2026 over 8 trillion in US bonds will be maturing. Part of the plan is to lower rates and get the Fed to print more money, but international demand for dollars is what will drive this refinancing–it is still important. Foreign money accounts for over 30% of US debt demand. The dollar system can’t afford to break at the international level.

For China the big challenge is to convince the world to move away from the USD. And that’s why China created the digital yuan. Like all digital currencies, it solves the biggest problem countries face when leaving the dollar. It removes the paper trail and turns every transaction into a black box. The last thing you want is for the US, for Scott Bessent, to figure out that you’re paying the Chinese in RMB and using the RMB with other countries as well, rather than dollars. Big commercial banks are already on board with the idea. It’s already starting. Since 2023, HSBC and Standard Chartered have been part of China’s digital currency network. They see the value of being part of this because the Chinese economy is only going to grow bigger and bigger. Sooner or later, Chinese exports will be completely priced in RMB and payments will be moving more towards the digital space. Now, as a bank, that’s where you want to be, to facilitate trade and take a slice of the pie. So building a network isn’t very hard.

While China is taking things to the next level with the digital yuan, what is better than transacting in digital currencies? It’s earning a return for doing absolutely nothing. It’s financial technology at its simplest but finest. China is going to start paying interest on digital yuan balances. So if you have money in a digital wallet, it’s now like a checking or savings account. You will earn a return for the money just sitting there. So far, China has processed nearly 3.5 billion digital transactions totaling 16.7 trillion RMB in value. That is an insane amount of money happening in the digital currency alone.

Now, most of the usage is still happening within mainland China and Hong Kong. But with this move to pay interest on balances, Beijing is going to take things to the next level. How can China afford to do this? It’s the same way banks around the world make money on checking accounts. They take your money and they invest into short-term bonds. In return, they give you next to nothing. Well, the PBoC [People’s Bank of China] is ordering their commercial banks to pay interest to digital RMB wallets. And, for the banks, it’s a win-win. If usage grows, even more money will flow into the accounts held at participating banks. There will be more credit and lending going on in the Chinese economy.

It’s now or never for the Chinese to challenge the US in the digital payment space. The amount of payments [in the US digital payment space] could get really, really enormous. In the next 5 years, the stablecoin payments market could reach $50 trillion. That is an incredible jump from just $3 trillion today. If digital currencies do overtake everyday payments, the amount of money sitting around is a game changer. Digital payments is going to be a new frontier where the US and China will be fighting it out. The Chinese see it as a place to internationalize their currency even further to get exporters and importers to bypass dollar transactions.

For the US it’s even more existential. The Treasury Secretary Scott Bessent is betting the entire future of the US Treasury market on stablecoin adoption. He has made it mighty clear on multiple occasions that this is the plan:

Bessent: And we are going to put a lot of thought into the stablecoin regime and, as President Trump has directed, uh, we are going to keep the US the dominant reserve currency in the world, and we will use stablecoins to do that.

Bessent: Stablecoin legislation backed by US treasuries, er, T bills, uh, will create a market that will expand US dollar usage via these stablecoins all around the world. And I think that two trillion is a very reasonable number and I could see it greatly exceeding that.

So the digital yuan is a clear threat to Bessent’s plan. Bessent’s idea is for people around the world to use stablecoins, which is simply a token whose value is pegged to the US dollar. The money from the coins is then used to buy up short-term US bills, and that will be the new funding source for the US government.

But you see the problem here. There’s no incentive to specifically hold US dollar stablecoins. If the US manufacturing base is dropping and the majority of imports are coming from China, you might as well use the RMB instead. Furthermore, the dollar has become a hot potato. In the final week of the year, the dollar has continued its crash. In fact, over the entire year, the dollar is down more times than it was up. And this makes it even less likely for people to use stablecoins other than for transactions [i.e, as opposed to using stablecoins as a reserve]. It will just be touch and go–pay for stuff with USD and receive the item. There might not be a huge accumulation of USD from stablecoins [for reserves to shore up the USD].

The weakness of the dollar is helping to promote the Chinese currency in general. If you throw in Chinese banks paying interest on balances held in the digital RMB, it’s going to be a done deal. It’s all about incentives. When you have one currency falling and paying nothing while another rises and pays something, which will they choose? I think the answer is mighty obvious.

Things are looking positive for China’s currency. The RMB has strengthened for over a year against the dollar. It has climbed well past 7 RMB per dollar for the first time since 2023. It’s another confirmation of the trade war backfiring. And now Wall Street banks are in love with the currency. More foreign capital inflow, growth recovery, and Chinese tech is drawing money into the RMB. So, China suddenly paying interest on the digital yuan is not a coincidence. It’s an orchestrated move to get both domestic and foreign people to switch away from dollars. The greater the appreciation, the more countries will do the swap. And the longer Trump wages his trade war, this will become a self-fulfilling prophecy. China is riding the wave and they are playing their card supremely well.

According to Goldman, the RMB is still 25% undervalued, and there’s a good chance it will gain value in 2025. This is one of their highest conviction trades–which is a very bold claim by a Wall Street bank. Despite the yuan rising in value, Chinese exports will be fine. Why? Because there are simply no other affordable alternatives in the world. The US dollar is going to be collateral damage as the yuan rises higher and higher.

The rise of the digital RMB goes beyond just interest rates. Getting a half or 1% on your balances might be good, but it’s just a bonus. The true driver of this is Chinese exports. We are moving towards two different digital regimes. One will be the G7 that will be stuck using dollars and euros. They will be the ones actively using dollar backed stablecoins if ever. But with the BRICS in the global majority, the digital RMB becomes more of a reality.

Now, China’s trade with the US has been dropping since March–it’s down by over 20% almost every month versus a year ago. But with the rest of the world, including Africa and Asia, trade with China is still growing strong. This is where the real de-dollarization will happen. Africa and Asia are the prime locations where China will push out the digital yuan. Paying balances and interest is an ingenious move here. These countries will trade a ton with China. It will take as much for someone in Brazil [as in Africa or Asia] to open a digital yuan wallet when the rollout goes international. They get to buy stuff from China and their currency earns a return.

Within Latin America itself, there are big calls for de-dollarization.Countries are realizing, hey, holding dollars and revolving your economy around the dollar is dangerous. Now, some countries like Argentina are willing to take the gamble, but many others are not. Uruguay’s central bank is on a crusade against the dollar. This is one of Latin America’s most dollarized economies and it’s causing them a lot of pain. People have lost more than 50% of their purchasing power over the past 20 years and, because of dollar shortages, the country also can’t expand their money supply fast enough. As a result, the entire economy is constrained. So they want to de-dollarize.

This, of course, is where China comes in. They are the biggest trading partner with Uruguay. China imports a lot of agricultural goods, like soybeans and meat. So Uruguay can accept the RMB instead of dollars. China can easily start opening digital wallets there because people also import a ton of stuff from China. Electronics, cars, and machinery–they all come from China. This is one strategic move that China can afford. Paying interest on digital wallets could cost a ton. But, unlike the US, China is flush with a lot of liquidity and interest rates in China are just so low. Now the PBoC has ensured there’s a ton of cheap liquidity in the system. It’s why US banks can’t pull off the same stunt as China. Chinese banks can access money at just 1.5%. Which means they can easily pay interest on digital yuan balances without facing a squeeze. If anything goes wrong, the banks can simply borrow from each other at just 1.5%.

But the US simply can’t. The funding cost for US banks is nearly 4%. That’s double that of China. If US banks do pay that, their funding margins will collapse. And as we know, Wall Street is all about making money. The US Treasury can’t fund this as well. It will blow up the fiscal deficit and it’s going to compound the debt problem even further. So there isn’t much point for Bessent to greenlight this from a treasury standpoint. Can you get the Fed to pay interest on digital dollars? That might be possible, but it will be QE [quantitative easing]–printing money and just slapping another name on it. The Fed balance sheet will expand and even more dollars will flood the world.

The Chinese are really serious about this one. They have opened an operation center dedicated to the digital RMB. It’s all about internationalization at this point. And get this, there’s now a cross [border?] digital payment platform and another platform for digital assets. The game plan is quite clear here. China wants trading partners to transact in the digital RMB and access funds to enter Chinese investment assets like RMB bonds. So, the stage has been set for 2026. Just like how Beijing built their supply chains decades ago. We are seeing the groundwork being laid. China is telegraphing the punch and they are laying the plumbing for tomorrow today.