First, I would like to point out three news items that seem irrelevant but actually show parallelism in the context of recent developments.
The first news is that the Central Bank of China announced on Wednesday that China could directly start engaging in yuan-sterling commerce.
The second one is the announcement made by Iran President Rouhani on his official Twitter account, which reads: "Iranian nation will protect Iraq's holy shrines & they aren't alone. Iraq's Sunnis, Shias & Kurds all ready to defeat terrorism."
And the last one: Turkey's Energy and Natural Resources Minister Taner Yıldız issued a statement after "I"SIS captured Iraq's Baiji district where an oil refinery is located. "With the latest developments in Baiji, there will be a gap of processed oil products in Iraq. We predict that Iraq and north Iraq would demand meeting this gap from Turkey." And then, the Kurdish Regional Government of Iraq directly connected the oil substructure of Kirkuk to Turkey. These new items might seem ordinary to you since during the period of the crisis, we have witnessed many times that countries such as China and Russia tended to use local currencies instead of making commerce with the dollar; and some special clearing unions were being established where the local currency, offsetting and barter would be valid. Also, we are tired of hearing that kind of realpolitik announcements made by Iran.
You could also ignore the third news item by saying that Turkey has only one considerable refinery, SOCAR's refinery is still progressing, and the country's capacity is clear. But it is not actually so: These three news items, which share parallel aspects, do actually hint at many things.
Try thinking about this announcement of China with Russia and China's great energy agreement and also consider the U.K.'s official announcement of the possibility of leaving the EU, let alone its inclusion in the eurozone.
If the U.K. leaves the EU, the EU would enter a period of stagnation and debates about the euro being a reserve currency would be one of the main topics on the agenda. However, the euro is not a reserve currency on its own; it is only a part of the Bretton-Woods system and dependent on the dollar, the base currency of this system. It became practically impossible for the dollar to circulate in the system on its own since the early 1990s, so the coordinators of the system activated the euro at the end of the 1990s.
For this reason, China's desire to decrease its dollar-based trade volume might not be something new, as it has been expressed by Chinese authorities many times. But their pronouncement concerning the sterling rather than the euro to replace the dollar is significant news for the economy since it has immediate political results. This step firstly seems to overcome the currency system based on the dollar and the euro, which has complemented the dollar since the early 2000s; but in fact, it would paralyze the reserve currency system based on the two currencies, inactivate the monetary policies of central banks and create a systemic problem in the short term.
Also, the lack of demand for the dollar in commercial transactions would mean that the U.S. could not continue with high dollar currencies because the U.S. needs more export to close its deficits, stemming from international trade. And this could not be performed with a valuable dollar; so the actual value of the dollar must be decreased for that. But the decrease of the dollar to its actual value would upset all the balances of the eurozone, and it might threaten the EU, starting with Germany. The current euro/dollar parity is actually a distorted crisis value that does not reflect the real pricing and hints at this situation.
Also, the decrease in demand for the dollar in countries such as China means an upset in the balance of terror between the U.S. and China, which is a major systemic problem.
Besides, we have already begun to observe its political consequences; for instance, the U.S. choice of not intervening in "I"SIS' attacks and al-Assad's chemical weapon usage is the result of this. And the system starts to have a major deficit here. Then introverted countries that were suppressed by the EU and the U.S. before and ruled with a dictatorial regime started to fill those gaps by doing the contrary of what they had done so far. Today, Iran does that with Rouhani, and Rouhani's referring to Sunnis along with Shias is a sign of this.
On the other hand, the rise of Turkey's energy and market claims in the region and its attempts to shape energy resources is the result of all those developments. As Energy Minister Yıldız puts it, Turkey will be included in the region in terms of export, import and investment activities. It will serve newly emerging energy resources in the region to the world through its own commercial methods and transform energy into a commodity by processing it and making new investments.
Doubtlessly, this would mean a capital widening that goes beyond the borders of Turkey. But this is the point where the problem lies; and all the developments in Turkish politics, from the presidential elections to the choice of a "joint candidate," revolve around this issue.
On the other hand, both Russia and Iran might be currently forming 100 years of growth and regional activity strategies. Russia aims at a Eurasian Union, and it develops the energy pipelines to its east by making huge energy investments corresponding to $2 trillion.
The agreement made with China is the result of that.
Turkey would not be excluded from this, either. It is also significant that the Western world should boost Turkey's policies in the Middle East and the Caucasus to prevent Russia and Iran from becoming a systematic problem for the region. So, the organizations financed by Saudi Arabia such as "I"SIS do not have anything in common with Islam. They are new paramilitary war groups and have nothing to do with Islam. This is why I quote the first "I" in the abbreviation, since it stands for Islam.