Will World War III Be a “Dollar” Conflict?


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It’s appearing more and more that the United States’ major concern with Russia is not the Ukraine conflict, but the Great Bear’s alliance with China and other countries in the Shanghai Cooperation Organisation (SCO). That group seems poised to replace the dollar with another currency, perhaps the yuan, as the international choice for trade. And to organize a banking system for its members separate from the normal international banking channels.

04-china-currency-warSuch an action would greatly reduce U.S. power over world markets and global influence, which is just what Russia and China would prefer. The Ukraine conflict, then, would be the latest in ongoing struggles among the nations for positions of economic power, and the international political force that comes with it. It is also the most serious step toward a World War III of finance as the U.S. attempts to directly affect political affairs in the Ukraine, and oppose Russia’s efforts to do the same. America is united with the European Union in the effort, along with their military wing the North Atlantic Treaty Organization (NATO).

With the outbreak of the Ukraine crisis, Peculiar Progressive considered the possibilities of a military world war. We also pointed to the danger of taking on Russia due to its growing connection with China, both through BRICS, and a 2011 agreement for Russia to send 300,000 barrels of oil a day to China.

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It recently became clear that the Russia-China energy connection is growing even stronger. Russia’s natural gas producer Gazprom literally added more fuel to the mix last week, announcing that it expected a long-sought supply contract with China would “come into force by the end of 2014,” according to Reuters.

These Russia-China agreements, in turns out, are growing fruits of the SCO, founded in 2001 in Shanghai by leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan.

According to Wikipedia:

By 2007 the SCO had initiated over twenty large-scale projects related to transportation, energy and telecommunications and held regular meetings of security, military, defence, foreign affairs, economic, cultural, banking and other officials from its member states.


The SCO has established relations with the United Nations, where it is an observer in the General Assembly, the European Union, Association of Southeast Asian Nations (ASEAN), the Commonwealth of Independent States and the Organisation of Islamic Cooperation.

This was activity preceding the world economic meltdown. A year later, the disastrous 2008 financial crisis occurred, affecting countries throughout the globe.

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In 2007, observing the financial meltdown beginning, Iranian Vice President Parviz Davudi suggested to the SCO that it form “a new banking system which is independent from international banking systems.”

sco map, shanghai coop. map, mapBy this time Iran was one of the Observer States to the SCO. Others are Afghanistan, India, Mongolia, and Pakistan. The U.S. applied for observer status in the SCO, but was turned down in 2006.

Alasdair Macleod, a financial analyst, said in a TV interview last Thursday that at least Russia, China, India, and Iran, and perhaps others involved with SCO, would like to see the dollar replaced as the international currency. The dollar has held that position since the end of World War II. The U.S. is fighting to keep that from happening to the dollar. He said this situation could set the stage for a World War III, not based on military action, but on currencies.

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Russia, China, India are also united with Brazil and South Africa in BRICS, an acronym for the association of these emerging national economies. BRICS, too, in its first formal summit in 2009, called for a new global reserve currency. So the U.S. and EU are seeing through these two organizations–SCO and BRICS–these growing nations solidify and expand their unity.

Macleod also wrote on his blog goldmoney.com on March 21:

Assuming military options are a non-starter, the West’s financial condition is too fragile to withstand an alternative financial war with the world’s largest energy exporter and eighth largest economy [Russia], let alone a combination of Russia and China working together…

…the West is not just confronting Russia, but potentially China and the other SCO members as well. Russia’s relationship with the SCO brings with it the possibility of using gold as a weapon against the West, because most governments involved with the SCO have been actively buying gold while western central banks have been providing it. So far the SCO members have been content to accumulate the west’s gold on falling prices, being careful not to disrupt the market.

In a 2010 special to CFR, we discussed the U.S. interest in controlling Eurasia. We pointed to President Jimmy Carter’s national security advisor, Zbigniew Brzezinski, revealing in a 1998 interview that Carter in 1979 had provided the catalyst for the Soviet Union’s invasion of Afghanistan. The president signed a secret directive on July 3 of that year which aided enemies of Kabul’s pro-Soviet regime. Brzezinski said the move was calculated to induce the Soviets into the “Afghan trap,” thus “giving to the USSR its Vietnam war.”

Before that, in his 1997 book The Grand Chessboard: American Primacy and Its Geostrategic Imperatives, Brzezinski presented his premise that the U.S. must concentrate on Eurasia to remain the lone global superpower and “to make certain that no state or combination of states gains the capacity to expel the United States from Eurasia.”

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That, and more, is what Russia and China would like to make occur. And that is what the U.S. and EU would like to avoid, and hope a foothold in the Ukraine will help them avoid. They may have done that this past week. Following a summit meeting on Ukraine involving the U.S., Russia, the Ukraine’s new government, and the EU, a statement resulted indicating an agreement. The pact included the Ukraine stepping away from armed confrontation that could lead to civil war, and working to revise its constitution in a transparent way.

But a report Thursday evening from Sky News indicated policymakers remain wary:

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Western leaders have reacted cautiously to an agreement reached with Russia over a plan to ease tensions in Ukraine.

US President Barack Obama warned the West stood ready to impose further sanctions on Russia if no progress was made in de-escalating the continuing crisis.

Understanding that the Ukraine crisis represents a part of a larger conflict over international finance and political influence, expect the struggle to continue.