Will dollar dominance give way to a multipolar system of currencies?

From The Economist

In the wake of an invasion that drew international condemnation, Russian officials panicked that their dollar-denominated assets within America’s reach were at risk of abrupt confiscation, sending them scrambling for alternatives. The invasion in question did not take place in 2022, or even 2014, but in 1956, when Soviet tanks rolled into Hungary. The event is often regarded as one of the factors that helped kick-start the eurodollar market—a network of dollar-denominated deposits held outside America and usually beyond the direct reach of its banking regulators.

The irony is that the desire to keep dollars outside America only reinforced the greenback’s heft. As of September, banks based outside the country reported around $17trn in dollar liabilities, twice as much as the equivalent for all the other currencies in the world combined. Although eurodollar deposits are beyond Uncle Sam’s direct control, America can still block a target’s access to the dollar system by making transacting with them illegal, as its latest measures against Russia have done.

This fresh outbreak of financial conflict has raised the question of whether the dollar’s dominance has been tarnished, and whether a multipolar currency system will rise instead, with the Chinese yuan playing a bigger role. To understand what the future might look like, it is worth considering how the dollar’s role has evolved over the past two decades. Its supremacy reflects more than the fact that America’s economy is large and its government powerful. The liquidity, flexibility and the reliability of the system have helped, too, and are likely to help sustain its global role. In the few areas where the dollar has lost ground, the characteristics that made it king are still being sought out by holders and users—and do not favour the yuan.

Eurodollar deposits illustrate the greenback’s role as a global store of value. But that is not the only thing that makes the dollar a truly international currency. Its role as a unit of account, in the invoicing of the majority of global trade, may be its most overwhelming area of dominance. According to research published by the imf in 2020, over half of non-American and non-eu exports are denominated in dollars. In Asian emerging markets and Latin America the share rises to roughly 75% and almost 100%, respectively. Barring a modest increase in euro invoicing by some European countries that are not part of the currency union, these figures have changed little in the past two decades.

Another pillar of the dollar’s dominance is its role in cross-border payments, as a medium of exchange. A lack of natural liquidity for smaller currency pairs means that it often acts as a vehicle currency. A Uruguayan importer might pay a Bangladeshi exporter by changing her peso into dollars, and changing those dollars into taka, rather than converting the currencies directly.

So far there has been little shift away from the greenback: in February only one transaction in every five registered by the swift messaging system did not have a dollar leg, a figure that has barely changed over the past half-decade. But a drift away is not impossible. Smaller currency pairs could become more liquid, reducing the need for an intermediary. Eswar Prasad of Cornell University argues convincingly that alternative payment networks, like China’s Cross-Border Interbank Payment System, might undermine the greenback’s role. He also suggests that greater use of digital currencies will eventually reduce the need for the dollar. Those developed by central banks in particular could facilitate a direct link between national payment systems.

Perhaps the best example in global finance of an area in which the dollar is genuinely and measurably losing ground is central banks’ foreign-exchange reserves. Research published in March by Barry Eichengreen, an economic historian at the University of California, Berkeley, shows how the dollar’s presence in central-bank reserves has declined. Its share slipped from 71% of global reserves in 1999 to 59% in 2021. The phenomenon is widespread across a variety of central banks, and cannot be explained away by movements in exchange rates.

The findings reveal something compelling about the dollar’s new competitors. The greenback’s lost share has largely translated into a bigger share for what Mr Eichengreen calls “non-traditional” reserve currencies. The yuan makes up only a quarter of this group’s share in global reserves. The Australian and Canadian dollars, by comparison, account for 43% of it. And the currencies of Denmark, Norway, South Korea and Sweden make up another 23%. The things that unite those disparate smaller currencies are clear: all are floating and issued by countries with relatively or completely open capital accounts and governed by reliable political systems. The yuan, by contrast, ticks none of those boxes. “Every reserve currency in history has been a leading democracy with checks and balances,” says Mr Eichengreen.
Battle royal

Though the discussion of whether the dollar might be supplanted by the yuan captures the zeitgeist of great-power competition, the reality is more prosaic. Capital markets in countries with predictable legal systems and convertible currencies have deepened, and many offer better risk-adjusted returns than Treasuries. That has allowed reserve managers to diversify without compromising on the tenets that make reserve currencies dependable.

Mr Eichengreen’s research also speaks to a plain truth with a broader application: pure economic heft is not nearly enough to build an international currency system. Even where the dollar’s dominance looks most like it is being chipped away, the appetite for the yuan to take even a modest share of its place looks limited. Whether the greenback retains its paramount role in the international monetary system or not, the holders and users of global currencies will continue to prize liquidity, flexibility and reliability. Not every currency can provide them. 

"Sanctions are Economic Weapons of Mass Destruction, We Must Carefully Consider their Consequences" Raghuram Rajan

 

How to not be a VICTIM of western sanctions

 

China, Russia and the race to a post-dollar world

Rana Foroohar in The FT

Markets often react strongly to geopolitical events, but then later shrug them off. Not this time. Russia’s invasion of Ukraine is a key economic turning point that will have many lasting consequences. Among them will be a quickening of the shift to a bipolar global financial system — one based on the dollar, the other on the renminbi. 

The process of financial decoupling between Russia and the west has, of course, been going on for some time. Western banks reduced their exposure to Russian financial institutions by 80 per cent following the country’s annexation of Crimea in 2014, and their claims on the rest of Russia’s private sector have halved since then, according to a recent Capital Economics report. The new and more aggressive sanctions announced by the US will take that decoupling much further. 

It will also make Russia much more dependent on China, which will use the US and EU sanctions as an opportunity to pick up excess Russian oil and gas on the cheap. China is no fan of Vladimir Putin’s war. But it needs Russian commodities and arms, and sees the country as a key part of a new Beijing-led order, something Moscow is aware of. 

“China is our strategic cushion,” Sergei Karaganov, a political scientist at the Moscow-based Council on Foreign and Defense Policy, told Nikkei Asia recently. “We know that in any difficult situation, we can lean on it for military, political and economic support.” 

That does not mean China would break US or European sanctions to support Russia, but it could certainly allow Russian banks and companies more access to its own financial markets and institutions. Indeed, just a few weeks ago, the two countries announced a “friendship without limits”, one that will certainly include closer financial ties as Russia is shut out of western markets. This follows a 2019 agreement between Russia and China to settle all trade in their respective currencies rather than in dollars. The war in Ukraine will speed this up. Witness, in the past few days, China lifting an import ban on Russian wheat, as well as a new long-term Chinese gas deal with Gazprom. 

All of this supports China’s long-term goal of building a post-dollarised world, in which Russia would be one of many vassal states settling all transactions in renminbi. Getting there is not an easy process. The Chinese want to de-dollarise, but they also want complete control of their own financial system. That’s a difficult circle to square. One of the reasons that the dollar is the world’s reserve currency is that, in contrast, the US markets are so open and liquid. 

Still, the Chinese hope to use trade and the petropolitics of the moment to increase the renminbi’s share of global foreign exchange. One high-level western investor in China told me he expected that share would rise from 2 per cent to as high as 7 per cent in the next three to four years. That is, of course, still minuscule compared with the position of the dollar, which is 59 per cent. 

But the Chinese are playing a long game. Finance is a key pillar in the new Great Power competition with America; currency, capital flows and the Belt and Road Initiative trade pathway will all play a role in that. Beijing is slowly diversifying its foreign exchange reserves, as well as buying up a lot of gold. This can be seen as a kind of hedge on a post-dollar word (the assumption being that gold will rise as the dollar falls). 

New US limits on capital flows to China on national security grounds may speed up the financial decoupling process further. If US pension funds can’t flow into China, self-sufficiency in capital markets becomes ever more important. Beijing has been trying to bolster trust and transparency in its own system, not only to attract non-US foreign investment, but also to encourage an onshore investment boom in which huge amounts of Chinese savings would be funnelled into domestic capital markets. 

While sanctions against Russia herald more decoupling, it is also possible that the economic fallout from the war (lowered demand, even higher inflation) would push America and other nations into succumbing to pricing pressures that would favour Chinese goods. While there is likely to be a lot of political posturing on both sides of the aisle about standing up to Russia and China, it takes a long time to decouple supply chains. Policymakers in Washington have yet to get really serious about it. 

Beijing, on the other hand, is quite serious about the new world order that it is pursuing. In his 1997 book, The Grand Chessboard, Zbigniew Brzezinski, the former US national security adviser, wrote presciently that the most dangerous geopolitical scenario for the west would be a “grand coalition of China, Russia, and perhaps Iran”. This would be led by Beijing and united not by ideology but by common grievances. “Averting this contingency, however remote it may be, will require a display of US geostrategic skill on [all] perimeters of Eurasia simultaneously,” he wrote. 

Financial markets are going to be a major field of battle. They will become a place to defend liberal values (for example, via sanctions against Russia) and renew old alliances. (Might the US and Europe come together to forge a strategy on both energy security and climate change?) They will also be a lot more sensitive to geopolitics than they have been in the past. 

Londongrad oligarchs are being forced back to Russia’s embrace

Max Seddon in The Financial Times

As the west’s relations with Moscow plumb ever lower depths, the UK is abuzz with calls to do something about its oligarch problem. “We are going after the money,” Boris Johnson, foreign secretary, vowed after former double agent Sergei Skripal was poisoned. 

A group of MPs recently singled out law firm Linklaters for its work on the London float of En+, owned by sanctioned oligarch Oleg Deripaska, and called for a crackdown on “corrupt” Kremlin-connected tycoons. 

But the ones in real trouble may be the oligarchs themselves. They were once ideal go-betweens between Russia and the west. The real life models for the mafia money launderer in espionage novelist John le Carré’s Our Kind of Traitor saw no contradiction in sending their children to Eton. UK politicians had no qualms about staying on their yachts or serving in their boardrooms. 

Now, feeling equally at home in London’s Soho and Moscow’s Soho Rooms — the nightclub so exclusive that, according to legend, Roman Abramovich once did not pass “face control” — is a liability. Mr Abramovich, who epitomised “Londongrad” bling when he bought Chelsea football club and a house on a street known as “ Billionaire’s Row”, struggled to get a UK visa. Suddenly, oligarchs are too Russian for a west eager to clean up its act and too western for a Russia hunting for “enemies of the people”. Or, as the Russian saying goes: if you sit on two chairs, something vulgar will happen to you through the crack in the middle. 

“Even if you’re not sanctioned yourself, it still affects you,” a close friend of one of Russia’s richest oligarchs told me this week. “You go to a bank and the compliance department doesn’t want anything to do with anything Russian.” 

Today, oligarchs are like hipsters with even worse dress sense: nobody will admit to being one, even if you know them when you see them. 

Part of the problem is the nature of oligarchy, which has changed dramatically since Vladimir Putin took power 18 years ago. The classical definition is someone who acquired vast wealth, often through dubious political connections, by privatising state assets on the cheap, thus giving them huge power over the penniless political class. 

In the 1990s, it was widely held that the real power in Russia lay not with Boris Yeltsin, but the oligarchs backing him. The late Boris Berezovsky liked to give the impression he ran the country during Yeltsin’s frequent absences due to heart problems and that he had handpicked Mr Putin as the next leader. 

Mr Putin shifted the power dynamic in his first few years in office. Berezovsky and Vladimir Gusinsky, who challenged him through their TV channels, were forced to flee. Mikhail Khodorkovsky, who dared to take him on politically, was jailed for a decade. 

That turned most of the other oligarchs into supplicants working under an unwritten rule: they were allowed to keep their wealth in exchange for staying out of politics. 

The new set of prime movers were figures from Mr Putin’s childhood. They amassed huge fortunes after he became president — often through winning lucrative contracts from state companies such as Gazprom. After Russia annexed Crimea in 2014, the US sanctioned these individuals first in the hope they would convince Mr Putin to change course. 

Instead, they circled the wagons around him. Yuri Kovalchuk, a billionaire banker who once owned a dacha outside St Petersburg next to Mr Putin’s, made a bizarre TV appearance in which he said that Russia had a “nationally oriented elite” that knew “what side of the barricades it was on”. 

He went on: “I’m not against having a flat abroad or a villa on the Cote d’Azur, be my guest. But the question is: where’s your home?” 

The more recent US sanctions have cast a wider net that has perplexed its potential targets. “Before, they were going after people who really made money with the regime. Now we don’t get what it is for. If you think we can go to Putin and tell him what to do, you don’t understand Russia,” one oligarch told me this week. If anything, he continued, the western attack on oligarchs benefits the Kremlin. First, moves against Russian capital push them to repatriate cash stashed abroad in western companies — a goal Putin has struggled to achieve for years. Second, many in the elite increasingly see little reason to leave key businesses in private hands, especially if they require state support. 

And now that several sanctioned oligarchs cannot pay off dollar loans to the state banks to whom they pledged major assets as collateral, they may not be tycoons for much longer. 

“Putin loves this,” the oligarch said. “The regime is winning. The people like it because nobody likes oligarchs, and the state consolidates.” 

The pressure the tycoons face at home and abroad has put the entire UK oligarch service industry at risk. I recently had dinner with my first Russian teacher, who now runs a consultancy helping oligarchs and assorted pretenders get their children into exclusive schools. When I mentioned that I had heard one businessman with a prominent UK presence was facing trouble after the state nationalised a company he part-owned, the teacher nearly spat out his food. “You’re joking!” he said. “He’s one of my best clients!”

Secret courts: justice conducted behind closed doors is no justice at all

If Britain has suddenly decided that open justice is a luxury we can't afford, then I for one was not invited to the debate

• 
• • Sarosh Zaiwalla
  • theguardian.com, Monday 19 August 2013 11.31 BST

Britain's home secretary, Theresa May, leaves Downing Street in London. Photograph: Stefan Wermuth/Reuters

Last March, I watched from afar as perhaps the most important case in my 30-year legal career was decided in a soundproofed room protected by a security guard. This was the first time in the UK supreme court's history that it had entered closed session for what has been aptly named a "secret court". It is a phrase we should get used to after a judge ruled last week that the home secretary, Theresa May, has the power to "terminate" high court challenges on national security grounds and push more cases away from public view.

This ruling is all the more worrying after my experience. Giving his final judgment on our secret court, Lord Hope described it as an "unwelcome departure from the principle of open justice", calling for a "stern and steadfast resistance to the use of that procedure" in the future. His call is one that every Briton should heed.

Representing Bank Mellat, an Iranian bank caught up in the middle of the sanctions battle between the west and Iran, I was tasked with showing that UK sanctions must be more than an indiscriminate attack on people living under regimes we dislike. My firm argued that the Treasury had no evidence to suggest the bank had somehow helped Iran's nuclear programme. The sanctions were at best irrational and at worst discriminatory. The supreme court agreed – but there was a catch. In a last ditch attempt to win the day, the Treasury claimed that they did have rock solid evidence … they just couldn't show anyone.

The dilemma was etched on Lord Neuberger's face as he announced the decision to enter a secret court. On the one hand, the Treasury insisted that the evidence must be kept secret for national security reasons, but on the other the supreme court risked undermining the whole system of open justice. Imagine being convicted of a crime by evidence you are not allowed to see and without the opportunity to defend yourself – that is the state in which the bank found itself. When the Treasury insisted that the supreme court view evidence obtained from the secret services, the judges obliged in good faith. Ultimately, the court attached little weight to this evidence and decided in Bank Mellat's favour.

The judges' concern, much like my own, is that justice conducted behind closed doors with evidence hidden from view is no kind of justice at all.

The ultimate driving force behind this self-mutilation of a proud justice system was the politics of security. Ironically, it is in our dealings with the alleged opponents of liberty that the dangerous, prejudicial and irrational politics of security push us to our most extreme. Just as the US Prism programme is unravelling the extent to which we have given up our privacy to GCHQ, so too are secret courts forcing us to be "free" in ways we are powerless to stop.

You need only look to the US to see the sacrifices made in the name of national security – a compassionless system fuelled by uncompromising secret surveillance of citizens and allowing the unchecked detention of suspects in Guantánamo Bay. Has the balance in the name of security gone too far? In Bank Mellat's instance, our supreme court may have dismissed the government's tactics, but it would be naive to hope that nine judges will be enough to rein in sustained attacks on British liberty if the rot of politics continues to eat away at our rights. Only days after the supreme court entered closed session in the case I was representing, a broad coalition of Labour, Liberal Democrats and Conservative MPs pushed through the Justice and Security bill, allowing the same secret courts used against foreign companies to apply to anyone living in the UK. This bill has now come into full force. Indeed, as the revelations about GCHQ's snooping make clear, there will be no dearth of information available to help the secret courts convict us.

If the British people have suddenly decided that open justice is a luxury we cannot afford, then I for one was not invited to the debate. It is perfectly reasonable to argue that the threats facing the UK warrant such suspensions of justice, but it is both absurd and dangerous to allow this vital judgment call to be made solely by those politicians who hope to wield the new powers against us. Privileges which we can surely only give up voluntarily have been wrestled from us without our consent.

The revelations of secret courts and Prism show just how little influence we have over our own rights. Indeed as Theresa May can now attest, not even high court judges can keep the government's secret courts at bay. It is time politicians asked for our permission before denying us access to open justice.

Compelling case for Iraq war crime tribunal

The Age of Deception: Nuclear Diplomacy in Treacherous Times by Mohamed ElBaradei

Reviewed by Kaveh L Afrasiabi

This book, eloquently written by a former director-general of the International Atomic Energy Agency (IAEA), is a must read, both for the wealth of information it provides on the contentious issues of global nuclear diplomacy as well as for the passionate and compelling case that it presents for a war crime tribunal to  prosecute United States and British leaders who instigated the calamitous invasion of Iraq in 2003 on the false pretext of weapons of mass destruction.

In blunt yet sincere language steeped in international law, ElBaradei writes that in light of the US's complete "disdain for international norms" in its invasion of Iraq, the United Nations should request an opinion from the International Court of Justice (ICJ) as to the legality of the Iraq war.

Convinced that the overwhelming weight of evidence favors a negative verdict if the ICJ ever braved such an initiative, ElBaradei then makes a case for the International Criminal Tribunal to "investigate whether this constitutes a war crime". (pg 87)

Irrespective, ElBaradei is so morally outraged by the blatant pulverization of a sovereign Middle East country by a Western superpower and its allies that he also advises the Iraqis to demand war reparations - that is sure to amount to tens of billions of dollars.

If for nothing else, this book's value - in putting self-righteous Western powers on the defensive and depicting them as essentially rogue states that have caused a new global anarchy by their willful exercise of power without much regard for the rights of others - is indispensable.

Divided into 12 chapters with a useful conclusion on the future of nuclear diplomacy, the book covers nearly three decades of the author's involvement with various cases, ie, Iraq, North Korea, Libya and Iran, the notorious "nuclear bazaar of Abdul Qadeer Khan" in Pakistan, as well as nuclear asymmetry and the hypocrisy and double standard, not to mention outright deceptions, marking the behavior of US and other Western countries (along the familiar North-South divide).

In the chapters on Iraq, ElBaradei defends the cherished record of his agency in refusing to act as a sounding board for post 9/11 warmongering US policies, which earned him the occasional venom of US media that questioned his integrity. In fact, ElBaradei is equally critical of the compliant Western media that often act as indirect apparatuses of state despite their wild claims of neutrality and objectivity.

Although much of what ElBaradei writes about the US-British deceptions to go to war in Iraq is already well-known, it is instructive to revisit those "grotesque distortions" - as he puts it - from a reputable source who for years was caught in the maelstrom of contesting politics of non-proliferation.

With respect to the British role under premier Tony Blair, whom he accuses of a false alarm on Iraq's chemical weapon capability, ElBaradei actually underestimates the degree to which London influenced Washington on Iraq, characterizing this instead as a "one-way street" with the British "acting as apologists for US". (pg 67).

But, ElBaradei is not a foreign policy expert and his shortcoming, in detecting the American foreign policy elite's vulnerability with respect to British political influence, is forgivable. This is a minor defect in a solid contribution that sheds much light on how the US manipulated the UN atomic agency as "bit players" in its scheme to invade Iraq.

It shows the Pandora's box opened by the IAEA when it agreed to receive foreign intelligence from member states spying on others, thus opening the door to calibrated disinformation often beyond the ability of the agency and its meager resources to authenticate.

As a result, today the IAEA has turned into a de facto ''nuclear detective agency" that constantly receives tips from Western clients targeting specific countries. Sooner or later, either this unhealthy situation is rectified or we must expect more gaping holes in the agency's credibility.

With respect to North Korea, which has exited the nuclear Non-Proliferation Treaty (NPT) and proliferated nuclear weapons without much international backlash, ElBaradei blames the US's failure to live up to its agreed commitment and the fallacy of "attempts to contain proliferation ambitions through confrontation, sanctions, and isolation". (Pg 109)

He also writes about Libya's voluntary disarmament in 2004, a decision that the late Muammar Gaddafi now regrets in his grave, given the likelihood that the North Atlantic Treaty Organization (NATO) would have thought twice about attacking Libya under the guise of "responsibility to protect", thus making a mockery of the UN, if Tripoli had retained a nuclear shield.

For sure, this issue must loom large on the mind of many developing nations that have clashing interests with the (increasingly bullying) Western powers.

ElBaradei has devoted a whole chapter to the subject of nuclear double standards that discusses, for instance, how South Korea's clear evidence of non-compliance was shoved under the rug by the US in 2004 simply because it is a US allay.

The US and other privileged nuclear-have nations have been derelict in their NPT obligations to move toward nuclear disarmament, some, like France and Britain, modernizing their arsenals, while at the same time having the audacity of taking the moral high ground against countries suspected of clandestine proliferation.

ElBaradei writes that in the Middle East, "The greatest source of frustration and anxiety was the regional asymmetry of military power symbolized by Israel's arsenal." (pg 223) And yet, Israel, which since its bombardment of Iraq's nuclear facility in 1981 has been mandated by the UN Security Council to place its nuclear facilities under the IAEA inspections, has evaded this obligation with impunity.

Regarding Iran, extensively dealt with in four chapters, ElBaradei seeks to present a balanced account that pinpoints the chronology of events, interactions and negotiations that are still ongoing as of this date, thus making the book an indispensable tool for those who follow the developments in the Iran nuclear crisis.

Since his retirement from the IAEA, ElBaradei has repeatedly gone on record to state that during his tenure at the agency he never saw any evidence that Iran was proliferating nuclear weapons.

What is more, he informs readers that after the 2007 US intelligence report that confirmed that Iran's program had been peaceful since 2003, "I received a follow-up briefing by US intelligence. They did not show the supposed evidence that had let them to confirm the existence of a past Iranian nuclear weapon program, other than to refer to the same unverified set of allegations about weaponization studies that had already been discussed with the agency." (pg 269)

He also writes, "The Americans did acknowledge - as in most previous intelligence briefings - that there was no indication that Iran had undeclared nuclear material." (pg 262) Indeed, this is important information, given that in more than a dozen reports on Iran the IAEA has repeatedly confirmed the absence of any evidence of military diversion of "declared nuclear material".

In Chapter 11, on the "squandered opportunities" with Iran, the author writes about Iran-IAEA cooperation through a workplan that resulted in the successful resolution of the "six outstanding" issues that had led to the IAEA's referral of Iran's file to the UN Security Council.

Missing in this book is any mention of that workplan's concluding paragraph that stipulated the agency's treatment of Iran's nuclear file as "routine" once those issues were resolved. That this did not, and as of today has not, happened is solely due to the US-led disinformation campaign that burdened the IAEA with new data coming from a stolen Iranian lap top, even though ElBaradei readily admits that "the problem was, no one knew if any of these was real". (pg 281).

He discretely blames his deputy, Ollie Heinnonen, now turned into a valuable US asset from his recruitment by Harvard University, of buying "into the US accusations" (pg 281), and laments the fact that on a number of occasions the US scuttled meaningful negotiation with Iran by "refusing to take yes for an answer".

Questioning the US's negotiation strategy toward Iran, in a memorable passage that rings relevant to today's context of new multilateral talks with Iran, ElBaradei writes: "It was naive to ask Iran to give up everything before the start of the talks and expect a positive response. But the problem was familiar, nothing would satisfy, short of Iran coming to the table completely undressed." (pg 313)

In a clue to the direct relevance of this book to the Iran nuclear talks this weekend in Istanbul, where the US has put its foot down by demanding Iran's suspension of its 20% uranium enrichment, ElBaradei readily admits that under the NPT, Iran has the right to possess a nuclear fuel cycle, like "roughly a dozen countries" around the world. Moreover, he reminds us of the absence of a legal basis for the US's demand, in light of the fact that "many research reactors worldwide also use 90% enriched uranium fuel for peaceful purposes, such as to produce medial radioisotopes". (pg 14)

As he puts it in the final chapter, on the quest for human security, this cannot be a selective, or rather elitist, process that benefits some while depriving others. In today's increasingly interdependent world, the idea that the threat of nuclear proliferation can be contained while the asymmetrical nuclear-have nations hold onto their prized possessions and even use them to threaten the non-nuclear nations, is simply a chimerical dream that has a decent chance of turning into a nightmare. This is the core message of ElBaradei's timely book that cannot be possibly ignored.

The Age of Deception: Nuclear Diplomacy in Treacherous Times by Mohamed ElBaradei. Metropolitan Books, Henry Holt and Company, New York, 2011. ISBN-10: 0805093508. Price US$27, 322 pages with index 340 pages.

Kaveh L Afrasiabi, PhD, is the author of After Khomeini: New Directions in Iran's Foreign Policy (Westview Press) . For his Wikipedia entry, click here. He is author of Reading In Iran Foreign Policy After September 11 (BookSurge Publishing , October 23, 2008) and Looking for rights at Harvard. His latest book is UN Management Reform: Selected Articles and Interviews on United Nations CreateSpace (November 12, 2011).

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