BRICS Consider Creating IMF-Alternative As US Loses Credibility

Tyler Durden's picture

The BRICS countries (Brazil, Russia, India, China and South Africa) have made significant progress in setting up structures that would serve as an alternative to the IMF and the World Bank (which are dominated by the U.S. and the EU), according to RBTH. As WSJ reports, the U.S. would lose its veto power on the International Monetary Fund's executive board under a plan being considered by some emerging economies. The countries are fed up with the United States' failure to ratify a four-year-old deal to restructure the emergency lender. Yet more loss of credibility on the global stage and, as Brazil's FinMin Mantega sums up, "the IMF cannot remain paralyzed and postpone its commitments to reform."

 

 

As The Wall Street Journal reports, the U.S. would lose its veto power on the International Monetary Fund's executive board under a plan being considered by some emerging economies.

The countries are fed up with the United States' failure to ratify a four-year-old deal to restructure the emergency lender.

 

Some members of the IMF's steering committee indicated at a series of weekend meetings their desire to act now, underscoring the growing discontent abroad about the U.S. Congress's delay in approving an international accord to overhaul governance at the fund.

 

...

 

The world's top finance officials gathering here this weekend chastised the U.S. in formal policy statements.

 

"We are deeply disappointed with the continued delay in progressing the IMF quota and governance reforms," the Group of 20 largest economies said in its communiqué.

And the various countries that would benefit from greater say in the actions of the IMF are not waiting for the US...

"Alternatives to move forward with the reforms must be found whilst the major shareholder does not solve its political problems."

And that is worrying for global stability...

Singaporean Finance Minister and IMF steering committee chairman Tharman Shanmugaratnam said it could cause "disruptive change" in the global economy.

 

"We are more likely over time to see a weakening of multilateralism, the emergence of regionalism, bilateralism and other ways of dealing with global problems," he said in a news conference Saturday. That would make the world a "less safe" place, he said.

And, as RBTH reports, it seems the BRICS are not slowing down efforts to create their own IMF-alternative...

The BRICS countries (Brazil, Russia, India, China and South Africa) have made significant progress in setting up structures that would serve as an alternative to the International Monetary Fund and the World Bank, which are dominated by the U.S. and the EU. A currency reserve pool, as a replacement for the IMF, and a BRICS development bank, as a replacement for the World Bank, will begin operating as soon as in 2015, Russian Ambassador at Large Vadim Lukov has said.

 

Brazil has already drafted a charter for the BRICS Development Bank, while Russia is drawing up intergovernmental agreements on setting the bank up, he added.

 

In addition, the BRICS countries have already agreed on the amount of authorized capital for the new institutions: $100 billion each. "Talks are under way on the distribution of the initial capital of $50 billion between the partners and on the location for the headquarters of the bank. Each of the BRICS countries has expressed a considerable interest in having the headquarters on its territory," Lukov said.

 

It is expected that contributions to the currency reserve pool will be as follows: China, $41 billion; Brazil, India, and Russia, $18 billion each; and South Africa, $5 billion. The amount of the contributions reflects the size of the countries' economies.

 

...

 

The creation of the BRICS Development Bank has a political significance too, since it allows its member states to promote their interests abroad. "It is a political move that can highlight the strengthening positions of countries whose opinion is frequently ignored by their developed American and European colleagues. The stronger this union and its positions on the world arena are, the easier it will be for its members to protect their own interests," points out Natalya Samoilova, head of research at the investment company Golden Hills-Kapital AM.

Perhaps the following sums it all up perfectly...

Economists warn the IMF's legitimacy is at stake, and they say U.S. standing abroad is being eroded.

"Eroded" indeed...

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kaiserhoff's picture

So they can print their own damn money.

Not a bad idea.  Why don't we do that at ZH and start a lost at sea gold fund with... never mind;)

Looney's picture

Slightly OT (sorry, ZeroBoyZ and ZeroGirlz!)  ;-)

THIS you don’t hear every day! 20 Greystone mercs have been missing in Ukraine. Brennan, scared shitless, went to Kiev NOT TO exchange “diplomatic pleasantries” with his Ukrainian counterpart – he is looking for 20 corzined Greystone employees, because both the State Department and Greystone have vehemently denied that any Greystone mercs are actually there, in Ukraine.

 

Link, Brennan -> http://www.voltairenet.org/article183269.html

Link, State Dept’s denial -> http://article.wn.com/view/2014/04/11/State_Department_Again_Denies_Presence_of_US_Mercenaries_in_/

Link, Greystone’s denial -> http://abcnews.go.com/Blotter/greystone-firm-accused-disguising-mercenar...

 

Looney

 

TruthInSunshine's picture

Mercs ultimately meet the destiny they so richly deserve.

It's akin to street justice, because the "real" courts are corrupt to the core.

ZerOhead's picture

As The Wall Street Journal reports, the U.S. would lose its veto power

Not going to happen. Ever.

Bindar Dundat's picture

Not without WW3 anyways....ur right -- this is serious stuff

Keyser's picture

How many wars can the US afford to fight at one time? It's a trick question. Technically none because they are broke. The fact is that the US will continue to wage war as long as people accept the USD as currency. 

Tengri Temujin's picture

The Chinese should be the base for the new bank, think about it, everything we, you and I buy is made in China, so with Chinese currency you can get anything you want, roads, bridges, laptops, food, medicine, clothes, electronics.  When a country gets an IMF loan that money gets paid in pensions and salaries and the commmon citizen buys consumer goods with it, why have the dollar as a middleman, go straight to the source, the Chinese yuan.

disabledvet's picture

Apparently the Wall Street Journal has lost its veto power.

No one listens to these Zombie Banks in New York anymore. I find it funny that at the end of their days all they have is their big, fat Wall Street Journal Mouth.

"Wow, the Dutch Air Force." The IMF isn't going anywhere (unfortunately. Just ask the Koreans.) Neither is the World Bank, NATO, Congress, the National Park Service, the Smithsonian, the Congressional Budget Office, etc...etc...etc.

"You can't fight City Hall"...it is really odd that of all of New York City "full on fighting City Hall"...and all other Governments of the world right now. Friggin' AIG. Unbelievable. Even the President couldn't believe it.

"commence show trials and more bailouts." JP Morgan personally had to bail out that City on many occasions.

Only New York City would have celebrated the end of the gold standard. "finally we are free from the one guy who supported us! but at least we still have our mouthpieces!"

"My Kingdom for horse." A lot cheaper than a "General Motor" that's fer sure.

ZerOhead's picture

They said "You can't fight city hall".

Buying it is a totally different matter altogether.

CH1's picture

Not going to happen. Ever.

So said Caesar. Ever is a long time.

ZerOhead's picture

The IMF is the most powerful Global Juice Extractor on the market.

Nobody pushes the 'liquify' button when a juicy country is in there except the owner.

cro_maat's picture

Brennen is not looking for missing Greystone mercs. He is negotiating the SILENCE (coverup) of their removal. The CIA will not raise a finger to retrieve a captured or lost asset. They only care about blowback.

Attributing evidence of soul at the CIA is pure propaganda.

Keyser's picture

Brennen is too late as videos are floating around the net already... 

https://www.youtube.com/watch?v=TysGhYvUofM

 

disabledvet's picture

"Jordanian Air Strikes."

We're on the side of Jordan in case you're wondering. I think we're on the side of Ukraine but it's hard to tell right now. Technically we're in charge of NATO...if the Netherlands goes to Ukraine does that mean the USA goes to Ukraine too?

I say "yes"...and I say "USA and Russia are at war by Saturday."

813kml's picture

That doesn't sound so bad.  Nuclear holocaust on Saturday, resurrection on Easter Sunday.

It'll be like it never happened.

Carl Popper's picture

I hope they are dead and their mutilated bodies are found and broadcast on TV.

 

We would do the same if russia sent private contractors to help our government.

 

Death to mercenaries.

 

We used to have a law forbidding private citizens becoming mercenaries and meddling in foreign wars.

813kml's picture

And US gov used to abide by the law.  At least I think so, it must have happened before my time.

Winston Churchill's picture

Officially denied.Say no more.

Hope Spetznaz aren't too rough on them,not.

sushi's picture

Have there been any reports of any conflict in Ukraine in which 20 people have been injured or killed?

I belive there was one reported death during the events in Crimea a month ago and a second reported death at an airfield in eastern Ukraine on April 15 / 16.

Beyond that . . . ???

Of course it is always possible they met the same fate as Buster Crabbe. You need to be very careful when you try and tap dance with the Russkies.

 

TruthInSunshine's picture

SDR comes closer to fruition, and the American Globalists (Gates, Buffett, Soros, Rockefellers, etc.) are as big supporters of it as anyone.

UselessEater's picture

While sowing more seeds for global war.

BurningFuld's picture

"North America" by itself is totally self sufficient. Having China not want to trade there would be the best thing that ever happened to "North America"

UselessEater's picture

Agree but you know and I know "nationality" and "nations" are not the end goal.

Tengri Temujin's picture

Hard to be self sufficient when we shipped them all our production lines, those machines and robots will not be allowed by the Chinese to ever leave their shores.

UselessEater's picture

Self sufficiency is the enemy. It supports an independant mass which is the current target of taxation, regulations and manipulation on a grand global scale. Your demise is someone else's profit, the longer your demise and the messier it is, the greater the profit and the greater the chances core groups get ownership to your nations resources and utlities, etc. Shipping industry to China from ALL western nations to varying degrees does not confirm who is left with ownership; the demise is still being fought over IMO and the BRICS are shielding yet another elite battle for whom from the core dominates. A split axis is code for war.

Meanwhile all sit passively and watch?? Defend your country already.

StychoKiller's picture

Ahem, HOW many silicon foundries are left in the USA?

Kirk2NCC1701's picture

The real concern of TPTB in DC and NY, is that their family and friends in Isreal and in KSA will no longer have US protection or funding.

Two-bits's picture

TiS, I have a question for you.

 

Has anyone ever put a voice to the thought that when all is ready for the big flush, the FED just closes it's doors and tells the US to go suck an egg?  That they are choosing to no longer supply dollars to the government?  They are a private corporation as federal as Federal Express, so who is to say they don't switch gears, change names, and then put the screws to someone else, or they create a new currency to refuck the next generation of Americans? After all, it (the dollar) is only paper and electrons.

 

Thoughts?  

The Gooch's picture

I imagine when you magically hatch, loan and collect moar eggs as a result, you don't give up your nest.

Pass the kosher salt.

 

Two-bits's picture

I fully see your point.  My question is about options other than moar.

 

Two months ago, no one thought Belgium loved USTs and would become the third largest holder of said bonds. Till they did.

 

I am asking about what we are going to know two months from now.

TruthInSunshine's picture

Only the elite who meet to beat know, but my best hypothesis is that there will be a "planned implosion" of this now 3rd iteration of the central fractional fiat reserve bank that somehow always manages to fool the sheeple that it's vested in the American Peoples' best interests.

After that implosion takes place, will there be a 4th iteration?...or none at all?....

Only time will tell, but I would bet that whatever happens does so by design.

Calling Elvis's picture

Only the elite who meet to beat know, but my best hypothesis is that there will be a "planned implosion" of this now 3rd iteration of the central fractional fiat reserve bank that somehow always manages to fool the sheeple that it's vested in the American Peoples' best interests.TruthInSunshine

Define the three iterations please.  If the question has already been asked I'm sure I'll see your response.

 


TruthInSunshine's picture

That would be affirmative, t-b.

Calling Elvis's picture

TiS is talking about this I believe:

http://en.wikipedia.org/wiki/First_Bank_of_the_United_States

http://en.wikipedia.org/wiki/Second_Bank_of_the_United_States 

The third being the current Federal Reserve Bank. Two-bits & TIS

 

Thanks - makes perfect sense - damn we live in a f*&ked up world - how is it so few see it?

Two-bits's picture

It gives central planning a whole new spin.

Speculators were once punished with death. Looking ahead...

Calling Elvis's picture

Don't know ZEROHEDGE policy on this sort of thing - I'd like to text privately - text - email - whtever -Two-bits and TruthInSunshine - I think I could learn a thing or two from them - I'd welcome you to give them my contact info djohnsojwp@gmail 

thanks - sorry if I busted some policy

Two-bits's picture

Hey elvis, gmail says:

djohnsojwp@gmail.com doesn't exist.  Typo?


Monty Burns's picture

No.  NSA were listening and and now neither the address nor two-bits himself exist any longer.

813kml's picture

I don't think it will be possible for the FED to find a greater fool to suck dry.

aVileRat's picture

Umm, just being a voice of reason but if you have an SDR with a secure hard-cap on when and how the "savings" of the world will be deployed it will theoretically prevent inflation wars and export dumping which will lead to stable, reasonable investments & growth vs. the current financial gimmickery of post 2007. In fact the whole "service" economy of everyone shilling consulting services to everyone else would be pretty damn stupid under a common currency regime where competitve advantage only comes from technical innovation vs. serf underpayment or bribe/tax gimmicks.

Or whatever: we can all just declare Putin the King of Eurasia and all convert to Vichy-Orthodoxy and pretend the Ruble is a stable haven for Alex Jones goldbugs.

The problem with the gold standard was that it only works until someone realizes they can simply collude to change the exchange rate, and suddenly the whole peg is gone; leading to total anarchy and debt force majuer. As we are witnessing today in slow motion with Germany and their own 'balance of payments'.

On a more reasonable note: the reason why the BRICS want more IMF power is so they can soft-back their own debasement policies with out needing to eventually address their malinvestment & structural reform issues. Do you really think Moscow or Bejing are going to use 40 Trillion in reserve lending capacity for helping out the average serfs purchasing power or back-stop a failing country ? of course not.

This being said, Barack is just buying for time. US has under-funded their share of the IMF for the last 9 years and has no intent to admit that Obama is coat tailing on IMF/trade agreements for the last 7 years because the deal breaker for Obama is to finally admit the US has heavily (and illegally) subsidized the automotive, computer science and agriscience industries for the last 20 years. For the next round to pass, Obama will need to unlock these sacred cows to US "growth" for all nations to compete against. I wonder why he and the White House is extending & pretending this problem does not exist, much like Keystone XL.

IMF has every right to boot the Obama white house to tier-2 backer. 

 

Confused's picture

pretty damn stupid under a common currency regime where competitve advantage only comes from technical innovation vs. serf underpayment or bribe/tax gimmicks.

 

Perhaps I'm wrong. But even under a common currency, there would be 'underpayment' and 'tax' (THEFT). Everywhere. This would not change. 

 

And bribes? Well........that will never go away. 

TheReplacement's picture

Any system that involves humans and wealth will have corruption.  It is better to limit the possible impact of one corrupt person via a decentralized as possible system.  Centralization and control are dog whistles to liars and thieves.

CH1's picture

if you have an SDR with a...

Fuck ALL coercive systems.

Simple enough?