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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pachanguero's picture

Btw, fuck off While you're arm chairing the political world
I really live here.

You think I have any influence here? Lol

I'm just a whoremonger with an MBA

I stay out of politics here. I love the people and banging chicks half my age.
so why bother my self with their problems

It reall much more fun than acting like some Internet crusader.

I'm going for some fish and a massage with happy ending

You have one more post to try and amuse me then go away

pachanguero's picture

You've been here for seven weeks and three days?  STFU and know your role. Zerohedge is my sandbox.

I've been here pushing four years.  I got street creds.  Check out my twitter account.  Pachanguero2 Thailand.

Got photos like that?  Loser! I'm travaling the world like a rock star! 

 

BTW, how's that hope and change thing working out for you?

Or are you in Germany planning the next Euro country to fuck over?

Like we say here Same, same  but different....... 

conscious being's picture

I don't think you do live here.

Nobody here thinks the way you do, unless you're one of those few, far between and now completely discredited Robert Amsterdam, George Soros, CFR kleptocrat carpet bagger wannabees, which based on your own words fits you perfectly.

Why don't you explain these phantom signs of pending civil war that you are claiming to see?

Btw, Ive been here since before Marla jumped the shark.  See if you can figure that out.

I'm sure I've been in the LOS longer than you as well.  LOS, can you decipher that? ... No.

Better yet, say something in passa Thai.  That should be entertaining.

... Crickets

Finally, you stole that mother's basement line from me, which I just used a couple of hours ago to rightly bash Tall Tom for his rampant Russophobia.

Maybe you and Tall Tom are sharing a cubicle together??  Am I right??

 

pachanguero's picture

I put up my twitter account that says it all.

If you think Thailand's problems are over then you have drank the koolaide aid. Again, you can't amuse me so go away.

Welder's picture

Legalize ALL drugs and hookers and the organized crime will have no funding. Then the govt. won't have a reason to "defend" you "volens-nolens".

Lea's picture

"Legalize ALL drugs and hookers and the organized crime will have no funding. Then the govt. won't have a reason to "defend" you volens-nolens."

Sure, great idea. It's not as if foreign mafias weren't just waiting for this kind of move. Legalize, and the next you know, you've got Thai, Chinese, Russia, Ukrainian, Colombian, Rumanian et al mafias clogging the streets, shootings at every street corner, showering the market with cheap dope and child prostitution. A radical move for sinking America to the status of an open-air crime corporation and brothel.

I suggest you watch again some mafia movies, because you may have missed a point or two... if you think Goldman Sachs is evil, wait until you have those guys on your doorstep.

Welder's picture

You have it on your doorstep right now BECAUSE drugs are illegal. It may sound outrageous to you, but if drugs would be available at the corner shop, then the mafias would lose their business.It wouldn't be cool to buy drugs too. I never said anything about child prostitution. Those who engage in paedophilia should be executed swiftly and publicly IMO. Hollywood Mafia movies are not among my research materials. Cheap drugs won't turn more people to drugs. Unhappiness, lack of moral guidance is driving them to drug abuse.

peter4805's picture

USA... Home of unwanted greenbacks and wetbacks

Nobody Important's picture

Maybe that's the reason they're letting in all these ignorent wetbacks. They figure they can still pay them with all those worthless greenback when no one else will take them.

DoChenRollingBearing's picture

"wetbacks" is the wrong word, including its perjorative meaning...  "Undocumented Democrat Voters" is a more accurate term.

mrpxsytin's picture

Do you think they might vote Republican if the Republican party made an effort to let them in? 

In Australia a lot of our immigrants vote for the conservative party because they work hard and don't want to see their taxes being pissed away on the welfare state. They don't want to see their taxes being fed to the racist bogans who tell them to 'fuck orf back 'ome, ya curry munchers and slant eyed gooks'. 

Here is a video of one of our native bogan folk really giving it to those Asians: https://www.youtube.com/watch?v=H-Zuu-rsodA 

No doubt she is a welfare recipient. 

in4mayshun's picture

Read a theory that the administration is purposely trying to create a crises on the border to give the UN a "humanitarian" excuse to set up shop on US soil. I can't think of a more likely reason so I suppose that theory is as good as any.

Welder's picture

It's worse than that. The purpose is to mix races. To destroy genes. A geno-cide.

MEAN BUSINESS's picture

you could if you try *warning* involves skull sweat, not just info overload

Dublinmick's picture

If we were not looking at a polar shift, Mexico would dominate the US under London guns. It sits on an ocean of silver. (think taxco pots and pans)

cherry picker's picture

Pride always cometh before a fall.  When DC started playing God in this world and believing it could do no wrong, it set the stage.

We are the audience.

 

HardlyZero's picture

If economies collapse, then expect RickShaw's to become very popular in Los Angeles and America.

Who will drive those bicycle taxis ??  (ah, the southerners)

Who will help run the different economy...like in post-collapse Rome, there were many 'slave' doing all the work.

 

Rickshaw vs. gasoline powered.

 

This may be in our future.

BobPaulson's picture

Post Rome collapse created local economies and a middle class. OK, that took a millenium and some plagues but hey, not bad.

conscious being's picture

Rickshaws - Victoria, BC's had them for years.

edit: pedicab not quite the same.

Joebloinvestor's picture

1. Who you gonna trust of any of these?

2. What is "lynchpin' or the "backing"? (GOLD?).

3. Watch the amount of banking crime and malfeasance increase in magnitudes.

skilaki69's picture

OK...dumb question. I have been hearing for a while now about the collapse of the dollar. So what exactly is going to happen? Are we going to be pushing our money around in wheelbarrows like they did in the Weimar Republic? Prices skyrocket? Additional unemployment? Any chance this can happen before the midterms? I guess I should start looking for ETFs that short the dollar.

tickhound's picture

No it's all good. That's not a digital wheelbarrow you're pushing. You're fine. The other side is the problem. Vote for me.

I can have you eating steak twice a year and believing that you're lucky. Trust me.

stoneworker's picture

Martial law, looting...insanity...guillotines...you probably won't be able to buy or sell anything once it starts...so yeah buying guns and canned food may not be the worse investment...I think paper silver/gold will also be useless...but my guess is they will do all they can to keep the kabuki theater going for another 2 years...in 2008 Bush was almost on his way out apparently they miscalculated by like a month or so and ended up landing in it...had they not miscalculated they could have been chest pounding and saying look what happens when you elect democracts. The difference is negligible between the two parties, but still nobody wants to be end up taking the walk of shame before the execution. The good news is that after all of this is over the US will rebuild and grow again, but hopefully without the war empire. I do have to ask has anybody noticed the large amount of movies/shows made very recently where the apocalypse happens? If you search list of apocalyptic films in wikipedia you see a steady increase from the past to modern times. Before 1950 - 4 1950-1959 - 11 1960-1969 20 1970-1979- 33 1980-189- 33 1990-1999- 34 2000- 2009- 58 2010-2014 -39 idk may be it's just a coincidence.

pakled's picture

" I do have to ask has anybody noticed the large amount of movies/shows made very recently where the apocalypse happens?"

 

Well sure. But the next question is, does art imitate life or does life imitate art?

stoneworker's picture

Great question. I think the eletes like these films/shows even more, because its like seeing the future....and also mentally preparing people for slaughtering each other.

conscious being's picture

Sorry, the only art in what you are describing [Hollywood film] is the art of managed, manipulative propaganda.

Welder's picture

Predictive programing. Hollywood controls the collective mindset.It creates the"zeitgeist". It's a formidable weapon.

Welder's picture

Predictive programing. Hollywood controls the collective mindset.It creates the"zeitgeist". It's a formidable weapon.

Miggy's picture

I like your optimism, Stoney. How they handle the gold/silver thing is the wildcard.

 

The goal is to be counted during the Rapture.

 

John 3:16

stoneworker's picture

I think if the insanity starts power could be shut off and the banks would simply be closed...so yeah good luck getting your paper gold/silver. Yes I paint a grim picture, but you know what that is the worst case scenario that could happen and if it does happen it's wise to prepared, because if you are not prepared you will most certainly be dead and if you are...well you will have some guns and ammo laying around in case of burglars or something, canned food in case some natural disaster comes along, some seeds that you might actually plant and lower your grocery bill, and some gold/silver that you can sell or pass on from generation to generation. 

pakled's picture

That's the 64+ trillion dollar question. There are so many ways this could play out. Regardless, the end game is not pretty. You hear a lot of platitudes spoken about "how the dollars will all come home" and what not. Much less often do you hear specifics. You may want to pick up a copy of Jim Rickards two last books, which paint pictures oh how this may go.

I think about this a lot and try to watch for how this will unfold. Have been for a few years now. Don't have any answers, and I'm leery of those who do. Too many moving parts. What comes first is that the non-dollar pacts have to be proven to work over time. That is a Big If. Rickards states that the only entity with a balance sheet that can take on this task is the IMF, with its special drawing rights (SDRs).

We may be getting close to the tipping point. As more and more foreign countries stop using dollars, the question is, what will they do with the dollars? Turn them into gold? Turn them into other currencies? Buy American debt, or not? Will the non-dollar movement spread so far that the US will become the only place where the dollar is accepted? That would "bring all the dollars home" for sure. But a LOT would have to happen before we get there.

The thing you learn too, when you start to study what triggers hyperinflation (the death of the currency), you learn that it can happen FAST. It's primarily a PSYCHOLOGICAL phenomenon. When the dollar rapidly loses purchasing power, because foreign currencies like the Chinese Yuan suddenly become really expensive, because dollars have been sold to buy Yuans as mentioned above.... when that happens there is a point where people panic and start getting rid of their dollars (buy buying currencies, gold, silver, food, land, etc. etc.) and the velocity of money goes through the roof. Then the snake is really eating its tail. The more and faster prices go up, the more people spend them.

But when? This "should" have happened by now, many people who follow this have thought. But we have the countering force of deflation at work. The proverbial unstoppable force meeting the immovable object. As economies wind down/crash, as credit tightens due to risk skyrocketing, demand dries up, money flows slow. Money velocity is a huge component to this.

The thing is, all currencies are in trouble. This article states that a new system is being developed by the BRICS. We'll have to see how that works out. But TRUST is up for grabs (re: hypothecation), and the new system will have to be based to a degree on trust, unless shiploads of resources are passing each other in the night on the way to the respective countries.

This is all uncharted territory.

Old Chinese curse: May you live in interesting times.

 

 

 

pakled's picture

BTW - "Old Chinese curse: May you live in interesting times"

 

Many have heard of this curse. Have you ever heard the entire curse? "May you live in interesting times" is actually #3 in descending order

 

#2: "May the government become aware of you"

 

#1: "May you find what you're looking for"

stoneworker's picture

lol number 2 is great))) 

Ides of November's picture

You may have noticed - the BRICS are hoarding gold.

stoneworker's picture

Physical gold...I feel bad for Germany.

grekko's picture

Why?  They have the Central Bank disease same as us.  You reap what you sow.  The gold is gone.

grekko's picture

Rickards is the ultimate insider.  What I like about him is that he tells it like he sees it, but I'm sure he knows much more than he writes in his books.  He says not to worry, a new monetary system will be created to take the place of the dollar, probably the SDR, backed by a basket of currencies.  All well and good for him, he's doing pretty well.  It's us guys in the middle class and poor that are going to take the big hit, not him.  If he loses 50% of his wealth, he's still doing pretty damn good.  If we take that hit, it'll just about wipe us out. 

Go long pitchforks, torches, and rope bitchez.

pakled's picture

To add to that, I personally pulled everything out of the markets about 4 years ago. There are a few ETFs that short the dollar, but TIMING IS EVERYTHING, especially with the leveraged ETFs. If you feel providence smiles on you in this area you could clean up. BUT, there are good arguments the dollar could go up as well. Many many black and brown swans circling overhead right now.

I personally keep half my resources in PMs and cash (50/50) and the other half in real things like seed, gardens, supplies, medicine, etc. All the usual suspects. Yes, the looters in pickup trucks, or the government, may come and take it away. But what the hell. What can you do? Real things seem the safest bet. And barter objects. Packets of seeds, cases of airline sized liquor bottles. It's all been listed on these pages and others ad-infinitum. Some will take steps. Some won't.

But then there is the universal law that seems to say: when you are absolutely positively sure its A, quite often it will in fact turn out to be B.

stoneworker's picture

I would recommend adding firepower to your list....less chance of anybody deciding that they want to "nationalize" your seeds. Also be good friends with your neighbors if they are good people it's good if somebody can watch your back.

pakled's picture

"I would recommend adding firepower to your list....less chance of anybody deciding that they want to "nationalize" your seeds."

Funny. And yes, of course. But I thought it through one time, and that is a big step. I would be hard pressed to not share with someone who had not had the foresight.

On the other hand, if they lay a hand on a loved one or try and take all they have... I wouldn't hesitate for a micro-second to pop a cap right up their ass and throw their carcass in the compost heap. (we also have a backhoe that digs deeper than what police dogs can detect. depending.)

 

"Also be good friends with your neighbors if they are good people it's good if somebody can watch your back."

It's ALL about that. Most everyone in my hood is a farmer.

 

:>


stoneworker's picture

You will most likely survive what will happen...yeah I do envy you the farm people are going to be the luckiest. I live in a city, but I have my bag ready to go to a summer house....not enough room to really grow crops, but at least wait out until most of the insanity is over. Good luck brother do take in some good folks if they arrive at your farm. 

pakled's picture

I can't find the link, but there is a youtube video (I believe it's youtube) of a hybrid kind of hydroponic/greenhouse garden that is is producing vegetables in a small space that is just off the scale in daily/weekly output. The most efficient use of space I've seen yet. Worth looking for in your scenario!!

We also keep lot of canned/packaged goods. I can tell you from personal experience that Mayonnaise will last 4 years or more. Mayonnaise!!. Canned meats, Rice dream, condensed milk, flour, and on and on... all will keep if stored properly. Other things that folks don't always think of... solar oven, solar shower, cans of coleman fuel..... 

 

And don't envy use too much. If we had to actually start living solely 100% from our gardens we'd be in a spot of trouble. We want to add cattle and goats and so forth and such as. Going 100% self-sufficient is a chore. We really should take off our hats to our ancestors who pulled it off. COMMUNITY seems to be the key though.

Cheers!

 

 

delacroix's picture

coleman fuel is about $10 a gallon. you're better off stocking extra propane tanks.

pakled's picture

You're right of course. Throw that advice out.

 

Unless you've been buying them in onesees and twosees for $2.50 to $3.50 a cylinder for the last 10 years, when you've had a couple of extra dollars in your pocket.

 

(And since you pointed it out, a small solar powered electric grid and small electric stove is naturally more sustainable. Before the solar I bought the tanks.)

grekko's picture

I think he's talking about the large bbq grill size propane tanks (actually LNG).  It's the best buy for the buck and they last a long time.

Wahooo's picture

If you have a summer house, there is always room for a garden. My 4x4 grows 128 bean plants, for instance. And please learn the basic wild, edible plants in your area - there is abundance almost everywhere.

tumblemore's picture

Not a dumb question and the true answer is no-one knows as there are too many moving parts (h/t pakled).

 

One thing is the US deficit can only be supported with the petrodollar so if it goes that means either the warfare state or the welfare state has to go (or half each). At least half the welfare state is needed to stop the cities burning down so that means at least half the warfare state will have to go.

 

So imperial pullback from half the world plus a much more authoritarian government to compensate for the reductions in welfare so something like a cliched South American state from the 1970s would be my guess.

 

As a first step anyway - predictions get less and less likely past that.