THE GLOBAL PAYMENT SYSTEM RULES EVERYTHING AROUND ME

THE GLOBAL PAYMENT SYSTEM RULES EVERYTHING AROUND ME

As billed, US President Donald Trump blasted Iran yesterday in his General Assembly speech, calling on other nations to join Washington in further isolating the Islamic Republic. The ballgame for Trump, as we wrote yesterday, is to force Tehran to agree to a more stringent version of the 2015 Nuclear Deal that the US, alone among its seven signatories, walked out on earlier this year.


The biggest point of leverage that the US has is its dominance of the global financial system, which enables Washington to force European companies to abandon their investments in Iran, even as Brussels pledges, with little effect, to shield them from US measures. When the next round of US sanctions hits Iran in early November, the Belgian-based messaging system that banks use to send money around the world – called SWIFT – will be under intense pressure to cut off Iranian banks even though Europe is opposed to the sanctions. Why? Because refusing to play ball with the US could expose the executives that sit on its board – and the global banks they work for – to US sanctions.

On Tuesday, the Financial Times reported that the US’s main partners in the Iran nuclear deal, the UK, France, Germany, China, and Russia, had agreed to a different approach: establishing an alternative payment system that would allow them to keep doing business with the Islamic Republic despite harsh new US curbs. The details are TBD, but in theory, a rival European payment system could enable interested parties to continue doing business with the Islamic Republic (or anyone else under US sanctions), by routing transactions through an alternative to SWIFT. But here’s the problem: any companies or banks that did so would probably risk US sanctions anyway. It would be risky to assume that the US, at least under Trump, is bluffing on this stuff.

Those practical matters aside, the fact that historically close US allies are joining China and Russia in challenging the 800-pound US financial gorilla is significant. America’s adversaries have long bridled at the US’s outsized influence over the financial system, which gives it a unique ability to inflict economic pain on countries that it disagrees with politically. The fact that the UK, France, and Germany are actively pushing a plan to skirt the US sanctions is a sign of how the US’s more confrontational, America-first approach is creating strange bedfellows.

This time last year, world health experts were speculating about why Africa appeared to have escaped the worst of the global pandemic. Younger populations? Natural immunity created by exposure to past viruses? Something else?

They can stop wondering. Africa is now in the grip of a COVID emergency.

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Listen: Stanford historian Niall Ferguson joins Ian Bremmer on the GZERO World podcast to talk about the geopolitics of disaster. Throughout human history we seem to be unable to adequately prepare for catastrophes (natural or human-caused) before they strike. Why is that? And as we emerge from the greatest calamity of our lifetimes in the COVID-19 pandemic and look to the plethora of crises that climate change has and will cause, what can we do to lessen the blow?

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Get insights on the latest news in US politics from Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington:

House Speaker Nancy Pelosi barred two Republican members from serving on the Jan. 6 commission. What's going on?

Well, the Jan. 6 commission was designed to be a bipartisan commission, taking input from members from Democrats and Republicans. House Minority Leader Kevin McCarthy had the opportunity to make recommendations but the Speaker of the House, Nancy Pelosi, could always veto those recommendations. In this case, she did, saying no to two members, Jim Banks and Jim Jordan, both of whom are strongly aligned with President Trump and who voted against certifying the election results in 2020. The Republicans for the most part see the Jan. 6 commission as an opportunity to score political points against them, and the Democrats say this is going to be a fair, non-biased, and nonpartisan investigation into what happened on Jan. 6, starting with a hearing next week with some of the police officers who were involved in the battle with the protesters inside the Capitol.

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In his New York Times op-ed, David Brooks says the US is facing an identity crisis — protecting liberal and progressive values at home while doing little to stop autocrats elsewhere. But has the US really abandoned its values abroad just because it's withdrawing from Afghanistan? Ian Bremmer and Eurasia Group analyst Charles Dunst take out the Red Pen to argue that the US can advance democracy without being the world's sheriff.

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When the Tokyo Olympics begin on Friday, Japan watchers will be following more than just the performance of Japan's star athletes, including tennis star Naomi Osaka. They will also be tracking the political fortunes of Prime Minister Yoshihide Suga, who is taking a big gamble by staging the event — amid a raging pandemic — in the face of strong and longstanding opposition from the Japanese public. What are the stakes for Suga, particularly with elections on the horizon? Eurasia Group senior analyst Ali Wyne explains.

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YouTube pulls Bolsonaro's rants: Google-owned YouTube pulled down a series of videos on the channel of Brazil's populist President Jair Bolsonaro, accusing him of spreading misinformation about the pandemic. YouTube removed more than a dozen clips for touting quack cures for coronavirus or claiming, in defiance of scientific experts, that masks don't reduce COVID transmissions. Last year, Twitter and Facebook also removed some content from Bolsonaro's feeds for similar reasons. But critics say that YouTube's move is too little too late, because Bolsonaro has been spreading misinformation about COVID since the pandemic began. Many Brazilians hold him personally responsible for the country's abysmal pandemic response, which has led to almost 550,000 deaths, the second worst toll in the world. Will YouTube's move change Bolsonaro's message? His weekly address to the nation, where he converses not only with government ministers but also various conspiracy theorists and loons, is broadcast on YouTube. Surely he doesn't want to risk losing that — or does he?

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Boycotts! Bans! Protests! Drugs! Think you've got gold medal knowledge about politics at the Olympics? Test what you know with this special Tokyo Olympics Quiz. And to stay current on all the latest political stories at the Games and around the world, subscribe here to Signal, our daily newsletter. Now, without further ado, the first question is...

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