.On multiple prior occasions I have predicted that any sanctions against Russia by the West will only backfire, expediting Russia’s re-orientation to the East and the unavoidable re-molding of the Western financial/economic model.

Russia’s re-orientation and subsequent creation of the independent financial system is what the banksters of Wall Street and London City fear most. This will eventually result in a catastrophe for the US/UK and EU, except for those European countries that succeed in re-orienting their economies to the East. Meanwhile, Russia, China and other countries in the Eurasian space, will benefit tremendously. Read: Ukraine Part 7: Russia’s Geopolitics, USA’s Bluff and EU’s Big Mistake.

The US and EU can be proud: as a result of their aggressively provocative behavior and the double standards galore, they managed to expedite the process by at least ten years.

The Presidents of Russia, Kazakhstan and Belarus have officially announced that the transition of the semi-formal Customs Union into the formal economic Eurasian Union will be expedited and completed by 2015. The Eurasian Union will adopt a new currency: Altyn (Rus: Алтын). Vladimir Putin announced that Altyn as the new Eurasian currency was originally planned for 2025, but now, due to the US/EU sanctions against Russia, the transition to Altyn may occur within 3-5 years.

Effectively, Russia is sending a signal to its “Western partners,” as Putin so diplomatically calls them, that since Russia’s interests are not being respected by the West, its new pivot is the East. At the risk of sounding like a broken record, I’ll repeat again: driving a wedge between Russia and Western Europe is one of the big geopolitical goals of the USA, and Western Europe is very, very foolish to allow itself to be duped yet again.

The Eurasian Union and Altyn announcements are in addition to the earlier announcement that Russia is developing its own universal payment system after Visa and MasterCard tried to block Russian transactions. The Visa and MC since backtracked, but the damage was already done. Russia may unveil its new sovereign payment system as early as this year. The new Russian system will be linked to the Chinese and Japanese sovereign payment systems, which are currently accepted in 70 countries. This payment system will eventually be used by the Eurasian Union. For more, read: Sanctions Backfire. Goodbye Visa: Russia Will Create Its Own Payment System

Eventually, the Eurasian Union may also become a military union, countering NATO.

The initiative to create the new currency came from the Kazakh President, Nursultan Nazarbayev. In 2012, Vladimir Putin supported this idea.

Altyn has a very ancient and long-ranging history. What is Altyn?

Altyn means gold. The word is of Turkic origin (not to be confused with Turkish). The Turkic family of languages includes languages spoken by the Siberian peoples, Tatars, Mongols, and of course, Kazakhs.

Russia always was a multi-national country and Turkic languages have been some of the widely spoken in the country. In ancient and medieval times, Russians traded and maintained very extensive relations with Asia and the Middle East. The Silk Road and other important eastern trade routes went through Russia. Medieval Russians routinely spoke Arabic and Turkic languages just as fluently as their native language. Some Turkic words became part of the Russian language. One such word was “denga,” from Turkic “tenge.” The contemporary Russian word for money is “dengi” in plural.

Another such word was “altyn.” From the sheer number of the financially related Turkic words it is clear how important historically was the Russian trade relationship with its Eastern neighbors.

Altyn was the name of the ancient gold coin once used by Russians extensively for trade with Turkic and Arabic neighbors. Later, in medieval times, altyn, or “altynnik,” became one of the regular Russian coins. In 15th century, altyn equalled six Moscow dengi, or 1/200s of a Moscow ruble. It also equaled three Novgorod dengi, or 1/100s of a Novgorod ruble. “Denga” was also called “kopeika” (kopeika is presently the 1/100s of a ruble). In the ancient times it was also called the arian “kuna.”

The old Russian proverb was: “Had nothing, and all of a sudden, altyn.” Rus: “Не было ни гроша, да вдруг алтын”. This is an equvalent of English: “From rags to riches.” In those days kopeikas and altyns were big money. And only the rich owned rubles. Of course, back then all currency was real gold, silver and bronze.

In this regard, the meaning of Altyn, “gold,” is very telling.

Through Altyn, Russia/Kazakhstan/Belarus, in short the new Eurasian Union, are sending a signal that they are targeting the gold standard. Along with China also targeting the gold standard through the Yuan, the new Eurasian currency will lead to the demise of the dollar as world reserve currency.

This is where it gets really interesting! Russia is one of the largest producers of gold. Despite that, together with China, Russia is a net importer of gold. Russia officially admits to roughly 1000 tons of gold in reserves. However, the real number is several times higher. China has recently increased its publicly admitted gold reserves from 1000 tons to just under 3000 tons. Again, multiply this by 2, or more. Kazakhstan is never spoken of as a gold powerhouse and they make it a point not to advertize their gold reserves. But in addition to the rich oil and gas deposits, as well as fertile soils, Kazakhstan possesses sizable deposits of gold. It is clear that their gold reserves are substantial.

According to Paul Craig Roberts and other analysts, the US gold reserves have been loaned out to dealers who sold that gold in order to maintain the illusion of lower gold prices, stable dollar and solvent economy; in short, to postpone the demise of the dollar as world reserve currency. Lately, when China started demanding delivery on its futures gold contracts, a large chunk of the US gold reserves had to be delivered to cover obligations and to avoid Comex default. It has been long suspected, and now it’s accepted by most observers, that the Fort Knox is empty. It appears the US gold reserve is all but gone, or at least greatly diminished. There is no way of knowing for certain how little of the publicly announced 8,000 tons of gold is left, since no audits of the US gold reserve are allowed.

I strongly suspect that at least in part, the Cyprus banking debacle was connected to the fact that Russia used Cyprus as its gold clearing house. My conclusion is that several years ago Russia quietly began demanding delivery on its gold futures contracts, just like China lately. And they did it via Cyprus. That was one of the reasons Cyprus banking haven had to be closed down: to make it more difficult for Russia to stockpile gold.

I believe that Russia discovered 5-6 years ago that the US had been dumping naked shorts in the market in order to keep the price of gold down and dollar value artificially up, and that Russia was first to capitalize on that on a massive scale, demanding delivery. If this is the case, then it becomes clear why the West believed that the Cyprus banking haven closure would be a blow to Russia. The official explanation that it was hurting Russian oligarchs didn’t hold water. I discussed why in my earlier piece on Cyprus here.

It appears that the US managed to temporarily slow down the Russian gold purchases. In addition, they leaned on India to slow down the India population’s gold imports. India’s population is considered the world’s largest holder and purchaser of gold. By estimates, Indian households privately hold 25,000 tons of gold.

These two moves bought the US a couple of years. Those who follow gold and silver will recall that crash of the gold and silver markets coincided with the timeframe of the Cyprus banking debacle. India’s ban on gold imports reinforced that.

Here is the problem: Since over the years US spent most of its gold reserves creating an illusion of the solvent dollar, they had to find more gold somewhere else when China started demanding delivery on its gold contracts. To accomplish that, the US had to raid the gold reserves of other counties whose gold it held in trust at the New York Fed. It became impossible to cover up the fact that the gold was gone after Germany demanded part of its gold back. Out of the 1500 tons it has been storing at the NY Fed, Germany demanded only 400 tons back. However, even that partial amount the US couldn’t muster. Germany was told that the delivery had to be made over the course of 7 years, at the rate of 50 tons per year. In the first year, the US was able to deliver only 5 tons, essentially admitting to the world that the US squandered the gold it held in trust for other nations.

The economic and financial system of capitalism and consumer economy is fastly collapsing. In conjunction with that, the re-distribution of power is happening. The energy is progressively shifting from the West to the East. This is a normal cycle. In medieval times the center of the world trade and riches were Asia, Russia and the Middle East. At the same time as Europe was destitute as a result of poor economy and devastating feudal wars; when cities like Paris and London were gloomy and highly undesirable places to be, Russia was called the golden-domed land of a hundred cities. In fact, there were over 240 cities in Russia at the time. At the time when Europe was going through the Dark Ages, the Middle East experienced the Golden Age punctuated with incredible breakthroughs in science, art and medicine. China and India were highly desirable places to be with untold riches, which were a dream of every traveler and merchant.

This cycle is making a full circle; the power is shifting again to the East and away from the West.

Through this entire decade, as well as the two decades that follow, humans will continue experiencing this tectonic revolutionary shift. We are present at the point of a fundamental transformation of the existing world architecture into something completely different. The new centers of power in the East are growing and the old ones in the West are dying. The 20th century capitalism and socialism were two sides of the same coin, meant to always oppose each other. The old capitalist system is now on its death bed. As the USSR socialist system went away with the collapse of the country, the old standoff between the two 20th century rival economic systems was supposed to stop.

Unfortunately, the US and those who are associated with the old system, won’t go away quietly. When the USSR collapsed, it did so quietly. The USA on the other hand, will try to drag whoever they can with them into abyss. It’s not about the socialism vs. capitalism any more. In fact, it never was. It had always been about the control of the world.

The USA empire will continue grasping desperately at straws. They will continue pretending they are still in control. They will make it as difficult as possible for everyone else to transition to the new system through sabotage and by instigating conflict and chaos. We have seen it in Serbia, Iraq, Afghanistan, Libya, Syria and elsewhere throughout the globe. We are presently seeing it in Ukraine. This is their modus operandi; they are not capable of admitting their mistakes or going away with dignity. They remind me of the Hollywood movie villains. No wonder Hollywood is so good at portraying villains – they observe them every day in their own country. As a character of the movie Knight and Day, starring Tom Cruise and Cameron Diaz, said addressing one such die-hard villain, “Just die already!”

As the US and EU debt burden grows, as economy falters, the US becomes increasingly desperate to slow down the progress of the newly emerging alternative Eurasian model. As I predicted many times before, this can only succeed very short-term and very temporarily. In the long run it cannot succeed. Only in the past year the US suffered some pretty humiliating blows as a result of the NSA/ Snowden scandal and the Syria fiasco. Any USA’s actions to undermine other countries will continue backfiring on themselves.

The creation of the alternative gold-backed and/ or natural-resource-backed currencies and economies, juxtaposed to the worthless Western paper currencies, and removed from the declining and corrupt Western economic system, will continue.

As I have predicted in the beginning of the Ukraine crisis, the decline of the West and the rise of the East is only being expedited by the actions of the US, EU and their Kiev stooges.

"Feng Shui Master"

I see....

We are now two years later and nothiug has happened yet.

Even news about the financial whistle blower that was on Russia Today has become old and forgotten news.

I agree no banking restructure has happened yet, but many things did happen in setting this up in the past two years. A major worldwide banking restructure is no small ordeal and lots of preliminary work is needed before it is activate and made live worldwide......

By Alonso Soto

BRASILIA Fri May 30, 2014
(Reuters) - The five BRICS nations will likely agree to fund their $100 billion development effort equally, giving them the same rights in a new multilateral bank that could start lending in two years, a senior Brazilian government official told Reuters on Thursday.

Capitalization of the bank was one of the main sticking points in the sometimes tortuous negotiations among the emerging powers to create a joint lender to finance infrastructure projects in developing nations.

The new bank would symbolize the growing influence of emerging economies in the global financial architecture long dominated by the United States and Europe through the International Monetary Fund and World Bank.

Negotiations to create the lender have dragged on for two years, with some members growing weary of China's desire to have a bigger stake in the bank by putting in more capital. But this hurdle is being overcome.

"The majority wants an equal sharing of the capital and there is no other specific proposal on the table," said the official, who is directly involved in the negotiations. "This is not going to be a problem."

Leaders of Brazil, Russia, India, China and South Africa are expected to sign a treaty to launch the bank officially when they meet at a BRICS summit in the northern Brazilian city of Fortaleza on July 15.

The bank, which will have start-up capital of $50 billion, will have to be ratified by the countries' legislatures and could begin lending in two years, said the official, who requested anonymity because he was not authorized to speak publicly.

Of that start-up capital, the countries will put in a total of $10 billion in cash and $40 billion in guarantees, which will be used to raise capital on international markets.

The new development bank would help cover growing demand for project financing that has not been fully met by global multilaterals, which for years have been heavily criticized for meddling in the domestic policies of sovereign borrowers.

"The bank will look into the finances of borrowers, but never intervene in their economic affairs," said the official. "Any country can join the bank with a $100,000 share. The idea is to provide them loans at a lower cost than what they would individually get in markets."

The BRICS will also decide if the bank will be based in New Delhi, Shanghai, Johannesburg or Moscow. Brazil will not offer headquarters because of upcoming presidential elections that could delay negotiations, the official said.

Later, the group will have to choose an executive "with experience in the financial sector" to lead the bank in a five-year presidency that will rotate among the founding members.

In five years the bank's capital should double to $100 billion through capitalization from funding members, debt emissions or contributions from new members. The BRICS will hold a minimum of 55 percent of the bank's shares.

June 11, 2014
The Brazilian cities of Fortaleza and Brasilia will host the 6th BRICS Summit on the 14th, 15th, and 16th July, an event that will showcase the growing economic clout of the five countries.

The 2014 Summit’s debates will focus on the theme “BRICS – inclusive growth: sustainable solutions”.

As part of a BRICS outreach strategy to emerging economies, a working session will be held on 16th July between the heads of states of BRICS and their counterparts from the governments of South American nations. Argentina had expressed interest in joining the powerful bloc, although BRICS have ruled out expansion of the group for now.

BRICS Finance Ministers and Central Bank Governors meeting, Trade Ministers meeting, Development Bank Presidents meeting, Business Forum and a session of the BRICS Business Council will be held on 14th July in Fortaleza.

The $100 billion Contingency Reserve Arrangement (CRA) will be launched at this year’s Summit and final details of the New Development Bank (NBD) will also be unveiled.

In the Durban Summit last year, leaders from Brazil, Russia, India, China and South Africa had approved a $100 billion fund to combat currency crises.

“The establishment of a self-managed contingent reserve arrangement would have a positive precautionary effect, help BRICS countries forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability,” South African President Jacob Zuma said after the five BRICS leaders met in Durban in March.

BRICS have 43 per cent of the world’s population and total foreign-currency reserves of $4.4 trillion.

Brazilian Ambassador José Alfredo Graça Lima addressing a press conference in Brasilia on Tuesday said the keenly awaited BRICS Bank will finance infrastructure and sustainable development projects.

Developing nations have long complained that the World Bank and International Monetary Fund are failing to address underdevelopment and Western nations have too much say over the management of these institutions.

The BRICS Bank’s start-up capital of $50 billion would eventually be built up to $100 billion. Russia has proposed that each member contributes an equal, 20 per cent share. All the members of BRICS except Brazil has proposed to host the Bank.

Social inclusion and sustainable development will be in focus during this year’s summit.

The 6th Summit will inaugurate the second cycle of BRICS, with each member country hosting one summit each.

The African Union attended last year’s Summit as observers even as BRICS countries try to increase bilateral trade with the continent. Meanwhile, the invitation this year to Latin American heads of states comes as the region tries to match the inspiring growth rates of above 4.3 per cent of 2004-11.

Meanwhile, South American nations are also jointly exploring the creation of a communications system to curtail US spying in the region.

Latin American countries raised a storm of protest after, according to US NSA leaks by former contractor Edward Snowden, the agency spied on an array of nations in the region, including Brazil.

The meet in Brasilia with a congregation of BRICS and South American leaders in attendance could call for an end to mass surveillance like the one carried out the US intelligence agency and gross invasions of privacy.

June 26, 2014

A Chinese idea of creating two New Silk Roads could be a big boom for a lot of people who live along the Silk Road route, and obviously all the countries at both ends of it, China expert Ann Lee told RT.

RT:What do you think is behind China's move to establish a global financial institution to rival the World Bank?

Ann Lee: China has announced that they want to create two New Silk Roads actually. One that connects Central China all the way to Europe [via] high-speed railway and other means of transportation, and then they would also like to create connections all the way down to Malaysia and possibly India. So this is a lot of infrastructure investment and China has been somewhat frustrated with the World Bank and the Asian Development Bank, in terms of the funds coming out from these entities to support infrastructure projects that will connect these regions. I think China basically decided that if they want anything done here they will just have to fund it themselves and bring along a bunch of partners. That is the prime motivation, which is largely to expand trade and economic influence.

RT: Do you think this planned new institution can really compete with well-established giants like the World Bank, or rival the US-backed Asian Development Bank?

AL: We have seen China establish world-class institutions that are challenging many things in the developed world, such as companies like OneWay and Telecom. I think that this is just a further extension of what China has been doing. China has come from [being] a backwater country 30 years ago and now is the world's second-largest economy, and China is basically showing the world that if there is a will, there is a way. Certainly there is a political will there to continue foreign direct investment outside of China. In order to continue their economic growth domestically, they need further exports, and this could [come from] expanding trade relationships with various commodity countries in Central Asia, and in the Middle East. So this is basically part of that strategic plan.

RT: A number of countries, including several wealthy states in the Middle East have already showed interest in the project. Do you think the project will make Europe and Washington nervous?

AL: I do not think that it will make Western Europe that nervous. China actually has had many conversations with European nations about various trade issues, and I’m sure this has come up with them; they are actually quite open to it. I would say the biggest country that has been resisting this is the US. China had actually tried to appeal for a larger share in IMF voting rights and would like to have a seat on the executive board, and the European nations have basically agreed to China’s request. The only one that objected was the US. So I do not think that China is going to come up against a lot of friction with the European nations, especially if they intend to have the Silk Road end there. Obviously they already had these discussions and I am sure the European nations agreed, otherwise China would not have announced them.


RT: Do you think Washington might try to hamper the initiative?

AL: There is no legal basis to do that, but Washington has already tried to hamper China. One of the Silk Roads that I mentioned is basically along the ocean going down to Malaysia and to South-East Asia and possibly India, and China wanted [their] navy to protect this new Silk Road. But that was thwarted by the US when the US decided to do the Asia pivot to thwart China’s ability to control the waters to protect this new infrastructure development. And this is truly interesting because the US, up until recently, had agreed that those waters belong to China. I looked into a 1972 version of the Encyclopedia Britannica and in that Encyclopedia, which is owned by a US company, it is said that these were China’s territories back then. And now the US is taking a completely different stance on it. So I would say that this is part of Washington’s strategies to try to thwart China from realizing this goal.

RT: What impact could this Asian Infrastructure Investment Bank have on the global economy?

AL: If China is able to succeed in doing this, certainly this will pour hundreds of billions dollars of loans into developing infrastructure, along with joining the Eurasian countries and this could certainly create hundreds of billions, perhaps even trillions of dollars in increased economic growth for the world, given that a lot of the countries along this route have not been necessarily participating in a lot of the growth recently, and that would include countries like Afghanistan, Iran and other Central Asian countries and Middle Eastern countries. So this could be a big boom for a lot of people who live along this Silk Road route and obviously all the countries [at] both ends of it.