The most important asset of the future

Last month some information surfaced from official records that the tiny EU member state of Belgium had purchased

Last month some information surfaced from official records that the tiny EU member state of Belgium had purchased more than US$140 billion worth of US Treasury Bonds within three months ending in January 2014.

Belgium has a very small budget compared to many other countries and it was revealed that the bond purchase was equal to one third of the annual national income of that country. So why would the Belgian government make such an investment at a cost of a massive deficit in its budget?

It turned out that Belgian central bank was persuaded (!) by the US Federal Reserve to be part of a bookkeeping trick to make the US Treasury bonds look still in demand in the international financial markets after an unknown holder of the bonds suddenly ditched the $140 billion worth papers. Speculation is that the culprit is either Russia or China.

Then, Russia and China recently announced a 30-year, US$ 400 billion worth natural gas deal, a trade that will be conducted without the use of US dollars.

So what? What is the relevance of the news for a reader in central Alberta, Canada?

We will all be well advised to follow and learn about these developments because these are the opening salvoes of a new kind of war that will affect each and every person on earth regardless of their nationality, race, age, gender or creed.

This new kind of war will have many facets: In countries where human life is not held in very high regard, like Iraq and Syria, it will continue to be fought with guns through proxies; in financial markets, it is and will continue to be waged by men in expensive suits over telephone lines and broadband Internet connections using digital data at stock exchanges and banks; and in the halls and rooms of big government offices by diplomats, government consultants, ministers and their senior aides.

Following the collapse of the Soviet bloc and the ensuing universal recognition of Multilateral Investment Guarantee Agency (MIGA) of the World Bank group as the single most important authority in international financial markets in early ‘90s, financial and banking practices which have been in use in the west for decades quickly spread to not only the former Soviet bloc countries, but to underdeveloped nations in Asia and Africa as well.

That meant access to the wealth in those previously unreachable markets and in the last quarter of a century since Soviet Union was dissolved, trillions of dollars moved from the smaller boardrooms of financial companies in, say, Moscow, Almaty, Jakarta, Darussalam, Tunis among others, to major centers like London, New York, Frankfurt and Zurich.

But something else happened, too: Now that the east has learned the rules of the game played by the west, we are witnessing the beginnings of a massive realignment of forces on a global scale in preparation for the new war.

But as we have already witnessed in the situation that has been developing in Ukraine, in this new war, alliances will be fluid, allegiances equivocal.

Europe, particularly Germany, given its overwhelming dependence on Russia for its energy input, will not blindly side with the US and the wealthy Saudi Arabia and other Gulf sheikhdoms will look elsewhere to secure their petrodollar-based wealth given the threat to the position of US dollar as the reserve currency of the international trade.

In the end, this new war will impact every bread earner of every household and every bank account holder in every country.

So the most valuable assets in the struggle for survival in the course of the coming war will be information and prudence in using that information.