Wednesday , 24 July 2024

Economic Showdown: The Power of SWIFT; The Fear of CIPS

China has introduced their own economic settlement system called CIPSch-lgflag – Cross-border Interbank Payment System – [which they intend to have] work alongside SWIFT, (the current  major economic settlement system in the world) and interface with it. Full implementation may take a few years but, as CIPS gains strength, its use will spread outward…[and] the more it spreads, the greater the Chinese influence over such entities as the IMF.

The commentary above & below consists of edited excerpts from an article* by Jeff Thomas which can be read in its entirety HERE.

The controllers of SWIFT…have the power to threaten financial institutions and sovereign nations that, if they don’t do as they’re told, can be denied access to the system. [More disturbing is that they have] created a global shakedown racket aimed at financial institutions. If a bank anywhere in the world is found to have a U.S. citizen as a client and the bank fails to regulate that client sufficiently, the bank itself is “held up” – the U.S. imposes a massive fine on the bank.

The controllers of SWIFT have been far from fair in making these judgements. Much of their agenda has been provided by the Organisation for Economic Co-operation and Development (OECD), a cabal made up of many of the world’s most powerful nations, but primarily Europe and the U.S..

The U.S. is the heavy here and they’ve used their power to create FATCA, a means of applying draconian economic pressures on their own citizens. In doing so, they’ve also succeeded in creating a global shakedown racket aimed at financial institutions. If a bank anywhere in the world is found to have an American citizen as a client and the bank fails to regulate that client sufficiently, the bank itself is “held up” – the U.S. imposes a massive fine on the bank.

Editor’s Note: If you have never heard of FATCA before I can’t blame you. That so few people understand what it is, is perhaps not surprising. Often, otherwise offensive government actions and institutions are given dull and opaque names to obfuscate their true purpose. Obama signed FATCA into law in 2011. To understand what this odious law that is all about, see here.

Not surprisingly, the banks of the world (other than the central banks, which are not targeted by FATCA) live in dreaded fear of making the slightest error in trying to please the U.S. government. They’ve been learning that although FATCA claims to be aimed primarily at its non-compliant citizens, there have been other targets. The U.S. government has used the opportunity to go after the bigger fish – the banks themselves.

Again, the reason for this success in creating this shakedown racket has hinged on U.S. control over the levers of the international financial system – the fear in financial institutions that the U.S. could simply end the banks’ ability to do business if they don’t pay the outrageous fines.

This scam only works as long as there is no competitor to the U.S. system, however. Should there be a free market in the transfer of money – should there be even one competitor in the world – one that does not impose economic mafia-like tactics – the potency of the U.S.’ threat would collapse. At that point, business and sovereign nations may cease their use of SWIFT and move over to the new competitor.

Cross-border Interbank Payment System (CIPS)

…China has had their own independent settlement system in the works for some time and it has now been introduced but…full implementation may take a few years. It will begin as a means by which to settle oil and gas accounts in keeping with agreements that already exist between China and other nations. As CIPS gains strength, its use will spread outward. This is a virtual certainty, as the more it spreads, the greater the Chinese influence over such entities as the IMF.

CIPS will not simply replace SWIFT. What will occur will be that it will be presented as a system that can work alongside SWIFT and interface with it. (e.g., if Germany wishes to have enough natural gas to heat its houses in the winter, Russia would require that the payments for Russian gas be settled through the use of CIPS.)

The final holdout will be the U.S., as it has so much more to lose. However, once isolated as the only country that avoids the use of CIPS, demands from China that interfacing take place will force the U.S. to either get on board, or be unable to acquire foreign (particularly Chinese) goods.

At some point along the way, increasing numbers of the world’s banks will cease to query account applicants as to whether they hold a U.S. passport. They will only wish to know if the applicant has access to CIPS. Over time, the FATCA shakedown will die away, as its driving force – intimidation of the world’s banks – will no longer have teeth.

The above article has been edited by the editorial team at (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here) for the sake of clarity ([ ]) and brevity (…) to provide a fast and easy read.


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