China Daily cartoon

Now Europe (incl. UK) openly joins the new BRICS-bank and Germany says to be alarmed about NATO/US aggression Washington must have a feeling they are losing control over a carefully designed dollar-centred world quickly.

As the second Wold War drew to a close and after two and a half years of planning for postwar reconstruction, the US decided to present its proposal for a new international financial system during the Bretton Woods conference in 1944. The US persuaded 44 countries to support a move to a new monetary system built around the dollar instead of gold. The start of the IMF and World Bank were part of the Bretton Woods agreement, which was the start of the United States as the economic superpower.

But now a good 70 years later the dollar hegemony is challenged by China and Russia, who recently introduced a new China-led international development bank to rival the IMF. The Asian Infrastructure Investment Bank (AIIB) was launched in October 2014 ‘with the backing of 20 other countries. In partnership with India, Russia, Brazil and South Africa, China also set up the New Development Bank, also known as the BRICS bank.’

Early March, to the shock of the US, the UK made public the were the first of the G7 leading economies to join the AIIB bank. According to news reports ‘Washington has been lobbying its allies not to join the AIIB’. An Obama administration official quoted anonymously by the Financial Times accused the UK of ‘a trend of constant accommodation of China, which is not the best way to engage a rising power.’

According to other media reports ‘a growing number of close U.S. allies were ignoring Washington’s pressure to stay out of the institution.’ A few days after the news from London we learned ‘France, Germany and Italy have agreed to follow Britain’s lead’ and join AIIB as well.

The Financial Times said the decision by the four countries ‘was a major diplomatic setback for Washington, which has questioned if the new bank will have high standards of governance and environmental and social safeguards.’

China’s state-owned Xinhua news agency said ‘South Korea, Switzerland and Luxembourg were also considering joining’.

Any reaction from IMF president Christine Lagarde on this yet? No, she is on her way to Asia for a three day long visit to China. On the geopolitical front things are changing rapidly now …