The BRICs Are Morphing Into An Anti-Dollar Alliance

Tyler Durden's picture

While numerous massively indebted administrations around the world hope to divert the attention of what's left of their struggling middle class away from its daily impoverished existence and distract it with flashing lights and glitzy animations showing another all time market high on a daily basis, a significantly more important shift taking place behind the scenes is appreciated by very few: the ongoing de-dollarization of the world. For the latest example of how increasingly more countries are setting the stage for the final currency war, we go again to Russia where VOR's  Valentin Mândr??escu explains that slowly but surely the BRICS - that proud Goldman acronym which was conceived to perpetuate the great American way of life by releasing trillions in US-denominated debt in heretofore untapped markets - are morphing into an anti-dollar alliance.

BRICS is morphing into an anti-dollar alliance, From VOR

Before the crucial visit to Beijing next week, the governor of the Russian Central Bank, Elvira Nabiullina met Vladimir Putin to report on the progress of the upcoming ruble-yuan swap deal with the People's Bank of China and Kremlin used the meeting to let the world know about the technical details of its international anti-dollar alliance.

On June 10th, Sergey Glaziev, Putin's economy advisor published an article outlining the need to establish an international alliance of countries willing to get rid of the dollar in international trade and refrain from using dollars in their currency reserves. The ultimate goal would be to break the Washington's money printing machine that is feeding its military-industrial complex and giving the US ample possibilities to spread chaos across the globe, fueling the civil wars in Libya, Iraq, Syria and Ukraine. Glaziev's critics believe that such an alliance would be difficult to establish and that creating a non-dollar-based global financial system would be extremely challenging from a technical point of view. However, in her discussion with Vladimir Putin, the head of the Russian central bank unveiled an elegant technical solution for this problem and left a clear hint regarding the members of the anti-dollar alliance that is being created by the efforts of Moscow and Beijing:

“We've done a lot of work on the ruble-yuan swap deal in order to facilitate trade financing. I have a meeting next week in Beijing”, she said casually and then dropped the bomb: “We are discussing with China and our BRICS parters the establishment of a system of multilateral swaps that will allow to transfer resources to one or another country, if needed. A part of the currency reserves can be directed to [the new system].” (Prime news agency)

It seems that Kremlin chose the all-in-one approach for establishing its anti-dollar alliance. Currency swaps between the BRICS central banks will facilitate trade financing while completely bypassing the dollar. At the same time, the new system will also act as a de facto replacement of the IMF, because it will allow the members of the alliance to direct resources to finance the weaker countries. As an important bonus, derived from this “quasi-IMF” system, the BRICS will use a part (most likely the “dollar part”) of their currency reserves to support it, thus drastically reducing the amount of dollar-based instruments bought by some of the biggest foreign creditors of the US.

Skeptics will surely claim that a BRICS-based anti-dollar alliance will not manage to deprive the dollar of its global reserve currency status. Instead of arguing against this line of thought, it is easier to point out that Washington is doing its best to enlarge the ranks of the enemies of the dollar. Asked by the Russia 24 channel to comment on Nabiullina statements, Sergey Kostin, the president of the state-owned VTB bank and one of the staunchest supporters of anti-dollar policies, offered an interesting perspective on the situation in Europe:

“I think the work on ruble-yuan swap line will finalized in the nearest future and the way for ruble-yuan settlement will be open. Moreover, we are not the only ones with such initiatives. We know about the statements made by Mr. Noyer, chairman of the Bank of France. As a retaliation for what Americans have done to BNP Paribas, he opined that the trade with China must be done in yuan or euro.”

If the current trend continues, soon the dollar will be abandoned by most of the significant global economies and it will be kicked out of the global trade finance. Washington's bullying will make even former American allies choose the anti-dollar alliance instead of the existing dollar-based monetary system. The point of no return for the dollar may be much closer than it is generally thought. In fact, the greenback may have already past its point of no return on its way to irrelevance.

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kliguy38's picture

You can keep your peso

Mr Pink's picture


Is there anything we can do to help you crash the dollar?


All of us

economics9698's picture

“In fact, the greenback may have already past its point of no return on its way to irrelevance.

No shit?  Ya think?  Around November 2008?

DoChenRollingBearing's picture

I am not worried at all about an anti-dollar alliance.  While there are certain benefits to having the "reserve currency" there are other drawbacks (must run trade deficits to provide overseas dollars/cuurencies).

The United States survived a long time before it had its world reserve currency.  We'll survive it again, and I DO mean that I think that the BRICs will get their wishes...

We need THEM less than they need us.  All four BRICs have severe weaknesses, and despite our many problems, the USA is better placed than the BRICs are.  Do we see many US citizens leaving the USA for BRIC-world?  We do not.

BobPaulson's picture

I disagree. 


That said. I keep reminding myself that I am far too biased against the dollar to allow clear rational thought, because I want to believe printing money is bad and shouldn't work. Nevertheless, years and years go by and the con keeps working. I keep reading to see if I am missing something.

bag holder's picture

Zerohedge has a profit motive too, and I'm sure hauling out the trusty old Russian bear sticky posts right before a patriotic holiday will be worth a few PetroDollars in ad clicks.

nope-1004's picture

This anti dollar wave sweeping the globe and negatively affecting the US, couldn't happen to a nicer, more pompous and arrogant people.

Reserve currency status has been a privelege, not a right.  Time will soon come when J6P will be REQUIRED to get off his ass and produce something good for mankind.  Being a SNAP suck don't cut it.


Freddie's picture

Well Americans and the American military are cowards because they gave up without a fight and never defended The Constitution.   They keep sending their sons to die in wars for banksters.  I bet 75% of the posters still watch TV and Hollywood like sheep which supports their serfdom.

Two-bits's picture

Yes, and the US is in bed with everyone.  Look at this cocksucker McCain:

ISIS are the terrorists,  IS are the terrorists. I am the terrorist? Oh shit, I see where this is going.

Anusocracy's picture


"An organism is a collection of problem solving devices - adaptations - that were shaped by natural selection over evolutionary time to promote, in some way, the survival of the genes that directed their construction." -Symons, 2005

Think of the organism as government, the adaptations are the structures created by government, natural selection as trial and error, and the genes are the elites who operate and benefit from the organism. You and I are the resources the organism consumes.

All of which is a product of the animal world and is something best looked at through a rear-view mirror.

Squid-puppets a-go-go's picture

this essay is pretty old news, and I note that ZH has yet to fully cover the newest nail in the $US coffin - 2 days ago FRANCE signed a yuan swap deal

im starting to think ZH isnt as cutting edge as it used to be

Pinto Currency's picture


.Unless the BRICS go to gold money, they will be no better off than the USD they seek to guard against.

Otherwise they will be just another failed paper scheme.

Lore's picture

Some articles provide context and background, giving hope to a fast-growing audience of new readers, that they might someday achieve your level of cutting-edginess.

BaBaBouy's picture

"" Dear Brics; Is there anything we can do to help you crash the dollar? Sincerely, All of us.

"" EASY Most Simple Answer: "BUY PHYS GOLD."

JoBob's picture

At least the US will not be pulling the strings on THEIR economic system.

Uncle Remus's picture

This is a fast moving world where the static end up dead or at best, irrelevant.

BigJim's picture

Looks like Rand Paul is trying to get himself a second passport,

Shame... I wonder what his Dad thinks...

Monty Burns's picture

Not overly significant.  Rand knows he has to pay obeisance to his real rulers or he'll sink without trace.

Farqued Up's picture

Know your enemy. Actually the dopes in Hollowood are turning on the gubmint Spooks as being an evil bunch of clap doctors.

HBO is degenerate toilet trash. But I don't choose to pay for that garbage, but I have no choice but to help subsidize the infomercials and the 10-12 channels of holy-roller dogma, if I want DirecTv.

FeralSerf's picture

Only a Real Masochist would want DirecTv.

shovelhead's picture

I like war movies, Freddie.

Miggy's picture

I look at the other large nations that want reserve status and I cannot see much more kindness and brothery love in those nations either.


China as a reserve status nation? Yikes. Using 10 year old gymnists for the last 8 Olympics when the minimum age is 13 is all you need to know.


John 3:16

Monty Burns's picture

Maybe. But I saw a report in the FT a few months back which claimed that despite all the hyperbole the dollar's share of global trade has hardly changed since 2007.

Aaaarghh's picture

You see, I dont want to associate the 1% of bastard cunt swindling low-lifes (politicos bankers etc) with the rest of the american people, of whom I am sure there are a majority that are decent and moral.

that being said the dollar was too open to abuse by tptb, and a more robust alternative needs to be found.

Antifaschistische's picture

I've been an anti-FED posterchild for 20 years.  I believe we've been very irresponsibile with the Dollar and I personally attend every anti-FED event..of which there aren't nearly enough.  I do believe the dollar will eventually get rejected abroad. compensation is 100% US Dollar...and, even if I have a commodity hedge, I will not walk away from a Dollar collapse with a big smile on my face. $10 per/gallon gas will ripple through our economy like a gang of African Army Ants.  

So...if you too get paid in US Dollars, just remember that it's collapse will mean you wake up one morning and get a 50% reduction in your pay.   No traveling abroad after retirement, no more yachting dreams, no cabin in the Sierras.   Yes, that will be justice for our irresponsibility and uncontrollable debt.  But it will not be a day of rejoicing, even for the "stackers" because our entire way of life will take a very serious haircut.

nidaar's picture

I've been paid in dollars all my life and never had those dreams even in my sleep. So let the bastard go down the hole, where it belongs to...

BobPaulson's picture

Good points. I have been buying land and a bit of gold, hoping the haircut doesn't hurt too much. I honestly look forward to a phase of less focus on shopping and useless bullshit. But yeah, it will be a tough adjustment.

Monty Burns's picture

Probably true. But the dollar's demise is an essential requirement for the Great Reset.  WIthout it J6P and the FSA will continue to lie in front of the lobotomy box like sated ticks.

Firepower's picture

Alarmism only works on the half-informed.

80% of Murkans are totally uninformed and so, immune: Ignorance is bliss.

Maybe 10% are informed and see the validity of your point. There is ZERO ALARMISM in Murka now even with Teh Interwebz so there's your proof.

The improved interpretation is Murka is now the only lifeboat for CashCreeps: What fool would park their stolen TRILLIONS extracted from taxpayers in Communist Dictatorships that will seize the ill-gotten pile if necessary.

Fiat Envy's picture

In theory what you say is true but without huge cultural changes the US is on its way to being third world or perhaps fourth world.  I dont see any willingness to cut off the FSA and  return to the sort of America that can be successful.  

Chupacabra-322's picture

Hence, the Immigration Invasion especially of children who can be easily indoctrinated in a decade or two via PsyOp / Programming into that Third or Fourth World Debt Slave.

FeralSerf's picture

They're new (replacement) livestock for TPTB! Just as the farmer needs to rotate his crops now and then and get rid of the non-productive diseased species, the lords and ladies of The Establishment must cull their old flocks and bring in new replacement lambs. Naturally there is some resistance and bleating among the existing sheep that will need to share their feed troughs with the new arrivals.

Monty Burns's picture

There's also a more subtle agenda to dilute the gene pool of the descendants of the nations founding stock.  The signs are everywhere if you learn to connect the dots.

FeralSerf's picture

They're not diluting the gene pool of the Rockefellers, the Bushes, the Kerrys, the Forbes', the Rothschilds and the Morgans are they?

The "poor white trash" become a bit browner (and easier to recognize by the police). Their owners, much like Mexico, remain "pure as the driven snow".

stoneworker's picture

Keep watching you see a lot of people from the BRICS coming to the US like they used to? 1999 was 15 years ago...The US may be a better place for now but that is all tied to the reserve has to get worse before it gets better, but I agree with you Americans will survive and prosper after the reserve currency is fact it could be an age of prosperity, but not through the war economy that is in effect right now, but through returning to real capitalism.

zhandax's picture

I have long said that the US would go back to making it's own shit when it could no longer afford China's.  Perhaps this will hurry that day along.  That said, the system we currently have is far from capitalism.  That, too, may change as more corporations continue to devour their capital base with these bullshit stock buybacks.  If we can get to the point that many of them impair themselves to the degree that a small financial disturbance causes a wave of corporate bankruptcies then smaller concerns such as those which created this country's real wealth can return to their rightful place of prominence.

You gotta admit, it would be great if cyclical tendencies worked like this...

stoneworker's picture

Yes this makes sense. The more they devalue the dollar the worse the hangover.

Squid-puppets a-go-go's picture

the US could and should go back to making its own shit. unfortunately, the choice its made to preserve its globa;l reserve currency has exviscerated iots manufacturing base - its got a LOT of catch up to do (especially in a world war situation) before it can become industrially self reliant again

Lea's picture

"its got a LOT of catch up to do (especially in a world war situation) before it can become industrially self reliant again"

A lot of catching up to do, indeed. I'm not of the moralistic kind, but one cannot help seeing that the "hard-working, penny-wise, industrious" American of fourty-fifty years ago has been replaced with a "what the heck, let's have dope, fun, sex and spend like there's no tomorrow" government/Hollywood-sponsored attitude that can do nothing for the re-industrialization of the country.

Unless you count on the immigants.

plane jain's picture

Live for today types do seem to dominate.  Probably because people have lost hope for tomorrow.

Gen X heard early and often that Social Security would be tapped out before we collect.  Wages haven't kept up with inflation.  If you manage to save anything interest on savings hasn't kept up with inflation. Stocks? Real estate? Ha.  So start out expecting to work until you can't and die broke.  

Things haven't exactly been getting rosier for generations since.  

plane jain's picture

On the upside how many years will it take to use up/wear out all the crap we already have?

its got a LOT of catch up to do (especially in a world war situation) before it can become industrially self reliant again

Tall Tom's picture

"...Americans will survive and prosper after the reserve currency is fact it could be an age of prosperity, but not through the war economy that is in effect right now, but through returning to real capitalism."


It is doubtful that America, and the rest of the World, will survive. The Growth Paradigm must be abandoned as resources will be scarcer.


The collapse will kill hundreds upon hundreds of millions, Globally, if not Billions. Starvation and want will be most prevalent.


Yes capitalism will thrive as it did in the Ancient World without large Governments. But as for modern comforts...they will be sorely missed but for a very few.


Do you really think that the World will be able to just shake this off?


Can you print Oil, Food, and Water?

stoneworker's picture

I believe that after a couple of revolutions take place and Americans/Euros/Japs....learn to live like the third world countries they much despise right now everything will calm down and real wealth creation will many people will die before that is very hard to predict.

jwthomps's picture

Almost no one understands this.

Welder's picture

The US demographics is rapidly changing. We might see americans leaving the US in the future. Not for BRICs though. At this moment, the most white countries (from a racial point of view) are in Eastern Europe, like Romania, Hungary, former Yugoslav republics and half of Russia.