While China, Russia and Iran may not be natural allies, “the enemy of my enemy is my friend” and they’re getting together to oppose the U.S. I’ve suggested before that President Obama’s efforts to isolate Russia are only goading these countries in their ongoing efforts to create a non-U.S. system for world trade and finance, a system that other countries (Germany, other BRICs, etc.) would come to do business with. Eventually bringing about the decline (or overthrow) of the U.S. dollar as the world’s key currency.

For my earlier posts on this, see here, here, here, here and here. The last was six weeks ago. What’s happened since?

• BRICS countries are still setting up a Development Bank, like the IMF and World Bank but serving their own interests. It “will begin operating as soon as in 2015…The currency reserve pool will assist a member country with resolving problems with its balance of payments” – such problems as, oh, the U.S. trying to undermine Russia’s economy.
• Russia has dumped 20% of its U.S. Treasury bond holdings. (It will be more significant when China does it, but there it begins.)
• China has slammed Obama’s sanctions against Russia.
• China and Russia deepen their ongoing military ties, such as a joint naval drill which they held a few days ago.
• China and Iran announce plans to deepen their military ties. “According to an Iranian news report, [China’s Defense Minister] Chang also said that China views Iran as a strategic partner.”
• A top EU Commissioner warned that “Any ‘sensible’ European Union citizen should oppose further sanctions on Russia because of the economic cost for Europe.” More recently, Germany’s Finance minister implies that the U.S. is a poor partner.
• If you believe the Voice of Russia (which tends to spew propaganda), Russia is reviving the GECF (like an OPEC for natural gas) with help from Qatar and other gas-producing countries. Also, Russia intends to use ruble/yuan instead of dollars in its energy trading.
• Putin opens Russia to greater Chinese investment. And large Russian and Chinese banks work out deals to settle payments in ruble and yuan, rather than dollars.
• A huge step forward for Russia and China: They finally sign their big natural gas deal. It’s worth $400 billion over 30 years, took a decade to negotiate and will involve tens of billions of joint capital expenditure by the two countries (e.g., new pipelines).



• “Russia may sign an agreement to build 8 nuclear reactors in Iran.” In other words, Russia views Iran as a strategic partner, and strives to help Iran’s nuclear program.
• In an interview, Putin says the ‘unipolar’ world order has run its course – and much more.

The non-U.S. dominated world: bit by bit, it’s coming.

Hat tip to Zero Hedge, which has long covered this story and furnished several of the above links.