The world is well into another ‘cold war’ which is being fought in financial markets over oil and currencies, economic commentator Simon Hunt said here on Wednesday at an MCC Chamber of Commerce & Industry event.

In the emerging polarisation, India might be playing the right card to gain without involving itself.

“The US was waging a war for regime change in Moscow by depressing crude oil price and rouble value. Against it, the challenge from Russia-China axis was real now. China was helping Russia both on oil and currency fronts. India, which always pursued independent foreign policy, seems to be observing the situation,” he said.

The recent fall in crude oil price has benefited India. In the unfolding US geopolitical game of containing China, Hunt indicated that India might gain in South China Sea, or in Afghanistan or Iran, or Central Asia.

He pointed out that India wants to be a full-fledged member of the Shanghai Cooperation Organisation.

The underlying economic indicators of the ensuing conflicts were manifest in various forms. Hunt said that China was swapping as much as 28 currencies and keeping Russian companies liquid by taking equity positions in its state-owned enterprises. It was also providing debt finance to Russia.

China-Russia axis was likely to buy up the oil and rouble shorts in the market placing the US banks (who were short) at risk, he felt.

China and Russia were also trying to link their currencies to gold as well as delink commodities with dollar.

With the backing of Washington, the IMF would possibly push for larger role of dollar-dominated SDR in the global payment system. However, the move might face strong opposition from the BRICS and SCO nations.

However, Hunt felt, unsustainable growth of US debt (substantially more than its GDP growth) and dollar crash would usher in the new global economic order, maybe some time after 2016.

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