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THE NEW SILK ROADS AND THE US DOLLAR

Will China build up the vast New Silk Roads/Belt and Road Initiative (BRI) with US dollars?

Michael Hudson has the answer:

"No, they are getting rid of dollars. They already are receiving such a large surplus each year that they only use the dollars to buy gold or some goods, such as Boeing airplanes, but mostly food and raw materials. When China buys iron from Australia, for instance, they sell dollars from their foreign-exchange reserves and buy Australian currency to pay Australians for the iron ore that they import. They use dollars to pay other countries that are still part of the dollar area and still willing to keep adding these dollars to their official monetary reserves instead of holding gold."

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U.S. President Donald Trump says "a lot of progress" has been made toward ending a tense standoff with Iran, even as tough language continues to be exchanged between the two sides.

"A lot of progress has been made. We'll see what happens. But a lot of progress has been made," Trump told a cabinet meeting on July 16, referring to Washington's efforts to persuade Tehran to negotiate over its missile program.

Trump's remarks echoed those made by his secretary of state, Mike Pompeo, who told the cabinet that Iran had signaled a readiness to negotiate with Washington on the matter.

"The Iranian regime is struggling to figure out what they're going to do with their economy because we've been terribly effective," Pompeo said.

"And the result is...frankly, I think it was yesterday, maybe the day before, for the first time the Iranians have said that they're prepared to negotiate about their missile program. So we will have this opportunity, I hope, if we continue to execute our strategy appropriately, we'll have this opportunity to negotiate a deal that will actually prevent Iran from getting a nuclear weapon."

Iran has been at the negotiating table from the very beginning, it's the US that has been intent on sabotaging any agreements.

Pompeo appeared to be referring to comments by Iran's foreign minister in an interview with U.S. television on July 15. Mohammad Javad Zarif, who was in New York for a UN conference, told NBC News that Shi'ite-led Iran would discuss its missile program only after Washington stopped arming Sunni Arab states Saudi Arabia and the United Arab Emirates, which are bitter regional rivals of Iran.

However, Alireza Miryousefi, a spokesman for Iran's mission at the United Nations, wrote on Twitter, "Iran's missiles...are absolutely and under no condition negotiable with anyone or any country, period."

"We categorically reject the...characterization of [Zarif's] comments to NBC News that 'if the U.S. wants to talk about missiles, it should stop selling weapons, including missiles, to regional states' as meaning that Iran is willing to negotiate on its defensive missiles," he wrote.

Tensions have surged between Washington and Tehran since the United States last year withdrew from a 2015 nuclear agreement with Iran and reimposed sanctions after the U.S. administration said the deal would enable Tehran to produce a nuclear weapon in a few years. The sanctions have devastated the Iranian economy.

Trump and other U.S. officials have said Iran's continued testing of ballistic missiles violates the spirit of the accord, claiming the technology can be used to develop nuclear weapons. Iran says its missile program is strictly for defensive purposes and that its nuclear program is for civilian use.

"They can't have a nuclear weapon," Trump told the cabinet meeting. "We want to help them. We'll be good to them, we'll work with them. We'll help them in any way we can, but they can't have a nuclear weapon. We're not looking, by the way, for regime change."

"They [also] can't be testing ballistic missiles," he added.

Iran has announced breaches of the 2015 nuclear accord and said that more will follow if Europe does not help the country overcome the damaging effects of U.S. sanctions.

Iran has said the breaches could be reversed if Washington returned to the deal, even as it accused Washington of waging "economic war."

"Western governments' major vice is their arrogance," said Iran's supreme leader, Ayatollah Ali Khamenei.

"If the country opposing them is a weak one, their arrogance works. But if it's a country that knows and stands up against them, they will be defeated."

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