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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andrewp111's picture

Not necessarily. The USA could grab the resources it needs militarily, and the unemployed youth can be drafted as a substitute for Welfare.  Manufacturing employment could make a roaring comeback when the dollar implodes, since we will have cheaper wages than our competitors. As long as the USA is self-sufficient in food, I would bet on our morphing into a military empire.

andrewp111's picture

What Russia and China are doing is preparing the battlefield for later. I expect nothing to change until the new Caliphate grabs control of the Mideast oil resources. Then oil goes to $300-500, and the dollar implodes. This could be years away, or not, so don't make any leveraged time-sensitive bets.

Dublinmick's picture

There are some ancient prophecies predicting the entire world will unite and destroy America. It is probably a pretty good bet at this time. There needs to be a fall guy at this point. I don't discount it, we are populated by some seriously retarded people at this point.

Tribe rabbis are urging their flock to get out of America these days.

Oh regional Indian's picture

Dubster, it looks like America needs no help in destroying itself from with-in, which is how it usually happens.

The hoardes will come for the clean-up after.

Luckhasit's picture

What if China decided to ship their cheaply made products to the likes of Russia and Africa in return for resources?

KashNCarry's picture

There's no market. Russia doesn't have the population to buy things, let aone the economy .  Since Chernobyl their population has been in decline.

BeetleBailey's picture

The USD: Fucked like Bobbi Starr and a herd of Mandingos .....in a phone booth.

BUT....let's roll call the BRIC currencies....

Brazil: LOL...please

Russia: Yeah...like the ruble is solid

India: Lots of fucking laughing....serious knee slapping....

China: Yeah.....unless the ChiComs attack, the Yuan is a laugher. In history, China has never attacked an outside country near her size - ever.

South Africa: LOL..sure...keffer...

NoDecaf's picture

That's some technical insight you've got there...please continue. Tell us more.

BeetleBailey's picture

Yeah....like technicals work these days Mr. 17 weeks. Fuck off.

LOVE the down arrows...must mean I'm right!

tumblemore's picture

they're creating a composite currency so yes you'd be right if you weren't wrong in a different and more important way

Ignorance is bliss's picture

all in all its just another brick in the wall...

zen0's picture

The Costanza Option dictates that this is Bullish for the dollar.

Ignore it at your peril

Jack Burton's picture

This didn't have to happen. The actions of the USA since 9/11 have been, to say the least, out of control and threatening. The wars, the drones, the claims to be exceptional. And many other things like the looting of the world via dollar hegomony. Is you are an American, then this thing is playing out well. You have the military power to attack and the financial power to print. The only thing is, others see this going on and they wonder if they are next on the hit list. Russia has woken up to the fact that the hit is now been put out on them. Obama and his neocons release threats against China almost daily. Our State Department says "Fuck the EU". The NSA spies on every one, every where, and all world leaders and all world corporations. The smaller countries are knocked off one at a time. Afghanistan, Iraq, Syria, Libya. Hits are out on Iran.

I don't need to go on, we all get it. The wrold is simply waking up to the threat and they are reacting. The dollar is the reason the US can spend twice what it produces every year. It is why government can print to fill the 1/2 of spending taxes don't cover. Inflation is exported via the dollar. A system of wealth imports into the USA and USA export of green paper is leaving world producers with green paper, while oil and manufactured good flood into the USA.

Seriously now, You can't tell me you thought this game would just last forever? I am shocked that this dollar system has been allowed to carry on untouched as it strips the worlds wealth and enables the world's wars. Ukraine is only one world hot spot, but it was the final straw for many, illegal coups, nazis legions attacking villages. What the fuck, it ain't 1942 is it? Well, I am betting, that the Ukraine coup and present civil war was simply one step too far for the rest of the world, minus the tame paid off EU leaders. Populations in the EU are not as supportive as their purchased leaders. But BRICKS see the writting on the wall, the dollar gang is coming to get them too. Even Brazil has figured that much out, when we spied on their oil companies and tried to kill off their economic progress by back door spying on their industries and banks. The recent attack on the criminal French bank who traded with US enemies, well, that will wake up some Frogs too!

 

Ides of November's picture

What happened in 2008-09 at the depths of the GFC with the massive fraud so nakedly carried out was when things really emerged into the open that the system that is preached to us - that of capitalism - is false. Completely false.

Only someone not paying attention could fail to see this. This may be the vast majority of Westerners, but even among the ignorant many know they are being fucked. They just choose to live in blissful ignorance.

The tipping point at which the rest of the world (led by Russia) started waking up was the campaign to start bombing Syria.

Hang on - there's a Russian military base there? Bombing Syria is bound to piss of the Russians. Isn't this obvious?

Hang on - Syria is Iran's biggest ally, without Syria, Iran's options in Lebanon and Palestine/ Gaza are severely restricted. Trying to force regime change in Syria so openly is bound to piss off Iran (who can always bomb Doha, Dubai, Abu Dhabi, Straits of Hormuz oil tankers at will).

Hang on - so why do we want to bomb Syria to allow Islamists morons to take over from a secular dictatorship? Why oh why?

The stupidity of that was narrowly averted by - thankyou - actual US & British citizens who bombarded their Governments and said stop. WTF are you doing? For once people power averted what would have been (and might still be) a certain disaster.

And then we had Ukraine. The neocons have clearly learnt nothing!

Syria & Ukraine have definitely spurred the Russians to "wake up" and realise what is going on here. Its completely obvious, and luckily for them - there are plenty of allies waiting to join them.

I see a G20 split coming - perhaps in 2015 during the Turkish hosted summit - which happens to start on Friday November 13, 2015 - The Ides of November.

Watch the BRICs split into opposing camps (about 10 each depending on what the likes of France, Italy and the titular European Union do). Do they follow Germany into Russia's arms, or stick with the UK/ USA?

I would predict they'll look East.

And yes - that explains my moniker. The clock is ticking. We have about 16 months........

conscious being's picture

A point arrives where it is clear, a course correction is required.  Maybe you place bets on the impending, necessary course correction.  It doesn't happen.  WTF!?!  The economy, the system roars right past the bridge-is-out sign like a run away train.  Now you realise this is all going to crash horribly.  They're going to crash the whole casino.  Kill their golden goose.  

The only answer to why is that we have arrived at peak-fraud.  Under the covers, its all been so abused that no part of it can be put right in the clear light of day.

Bond fraud.  Stock fraud.  Mortgage fraud. Government fraud.  War fraud.  Affinity fraud even john kohn lurch.

And we have seriously and inappropriatrly pissed off most of the rest of the world.  

They trusted us.  They trusted our good name.  And we stuffed them full of fraud.

Karma adjustment awaits.

turbochef69's picture

Only 3 things to remember-

Oil Petrodollar Control

Debt Infusion Control

Natural Asset Theft

smacker's picture

I agree with most of that but not that the problem is "capitalism". What was going on before 2008 and since is corrupt capitalism or crony capitalism. It's a bastardisation of capitalism carried out by criminal fraudsters in the banking system and government. Now being stitched up by more criminals in the central banks and IMF.

andrewp111's picture

You need to understand something. Obama wants the Islamist morons to have their Caliphate. That is why he shipped all those arms to ISIS from Benghazi. He wants the price of oil to go sky high so his Global Warming/Green Energy crusade can be successful. He needs to depopulate the suburbs and herd everyone into the cities so they will have to vote Democrat. This is about political power and implementation of ideology.

smacker's picture

"That is why he [Obama] shipped all those arms to ISIS from Benghazi."

I'm glad you mentioned that. It hasn't received anywhere near enough attention by MSM.

tumblemore's picture

Yes, i think the Ukraine coup and the unbelievably blatant lies about it in the bankster media was likely the last straw. It showed fedgov is literally run by gangsters.

 

andrewp111's picture

Out of the frying pan and into the fire.

Once the Dollar loses its reserve status, the USA will simply grab the resources it wants with raw military power. We will need to keep Canada in our camp, but proximity makes that doable. Instead of being dominated by dollar hegemony, large portions of the world will be conquered outright. I expect Obama's successors to execute this transformation during a crisis.

NoDecaf's picture

popcorn...we're gonna need lots of popcorn.

HardlyZero's picture

...and modern urban rickshaws to get to work on time.

Dublinmick's picture

You get the government you deserve, read the comments here.

 

http://www.ratical.org/many_worlds/6Nations/6nations1.html#part1a

grgy's picture

I'll feel better once I see every member of Congress, Senate, and the White House, and every DC lobbyist tatooed to a wooden cross.  Vengence is mine; I will repay, saeth the Lord.  I couldn't find a quotable atheist but you know what I mean...

August's picture

>>>Vengence is mine; I will repay, saeth the Lord.  I couldn't find a quotable atheist but you know what I mean...

And, to borrow from the young Jack Kennedy, God's work must surely be our own.

robnume's picture

One thing I quickly noticed as I started to travel internationally was all of the news about the USSA that never, ever makes it into print at home. There are wonderful hard news televsion programs which have never existed in the USSA. I love traveling for many reasons, but the eye-opening newspaper, internet and TV news programs are a truly enjoyable experience in themselves. A bit more propaganda now that the EU is in trouble, but all the same, our press here are a bunch of fucking no-nothing numbskulls. Go BRICS! It would be nice to see our "exceptionalism" wiped from our self-righteous faces. So these guys want to disengage from what is esentially a useless world reserve currency, the USD. So do I!

pakled's picture

Sure, but just remember there is not an industrialized nation that wouldn't have done the same thing the US has done post WWII, if they had been put in the same position.

 

Power is first used, then mis-used, then ab-used.

We all share the same human failings.

And... The few pulling the levers just exploit whatever advantages any country has at any one time.

 

turbochef69's picture

You are correct! I lived China 2009-2011. Most of the native people I spoke with thought Obama was an ignorant, arrogant dick.

Here's a 5,000 yr old cultture being told how to run their country by a moron who never ran as much as a lemonade stand.

Very simply put-SFN

shovelhead's picture

I'd hate to have to pay for that international travel when the dollar gets devalued about 75%.

You might be making a phone call instead.

Jstanley011's picture

Elvira? Mistress of the Dark? Haha. Hosting I Eat Your Skin.

Dublinmick's picture

"I'll feel better once I see every member of Congress, Senate, and the White House, and every DC lobbyist tatooed to a wooden cross.  Vengence is mine; I will repay, saeth the Lord.  I couldn't find a quotable atheist but you know what I mean..."

 

You may see that. we are entering the fifth world and culling of the souls or spirits. The creative concsiouness is well aware of what is taking place here. There is always cosmic justice. We see much smoke and mirrors but remember. we all pay the piper. There are much worse planets than this one and you don't want to be on them!!!!!!!!

August's picture

"If you use more than 5% of your brain, you don't want to be on Earth."

-  The Great Rip Torn

shovelhead's picture

As long as that piper takes Visa, I'm good.

BouncingCat's picture

Soon, no foreign government or investor will accept dollar denominated debt from the US government. They will insist it be in their own currency to protect themselves from dollar deflation.

Personality Disorder's picture

Reminds me of the old joke where the guy tried to screw his wife to death, putin doesen't know it, but we are really giong to make him sorry he ever messed with, what was it he messed with again?

dust to dust's picture

 The OIL producing Nations will be next. Petro what! Look out the GOLD STANDARD is closer than we know. 

yogibear's picture

The sooner the better. Long  past due. When the politicians flood the country with illegals while there are so many unemployed people the nation is bad shape. At least during the early 1900s the US was a industrial nation, now we exported jobs and manufacturing overseas.

Trying to print to make up for loss of production income eventually shows.

NickVegas's picture

H1-B, orchestrated destruction

Lin S's picture

I'd give you 1,000 up arrows if I could.

Wahooo's picture

When the SHTF, I for one will be siding with those illegals. They've done nothing but follow their own interests in a truly capitalist fashion.  And they will build the guillotines for cheap, Made In America.

Yen Cross's picture

 'Ides of March' suspended to September?

zerohedgejjxxzz12's picture

Why are so few people wide and awake in this world?

Everybody I talk to thinks that everything is fine, here in Canada we dont have any problems and the rest of the worlds problems don't affect us here. Even though Canadians personel debt is higher /person  than in the US.

It is very easy to see how the world is in the financial mess that it is in, nodoby seems to care enough to pay any kind of attention to anything, other than whats on sale downtown or lets go drink beer.

99% of the people I talk to have no idea whats going on in the world. No wonder we are where were at. Everyone trusts that their Gov is working for them and not themselves.

 First off, your gov is not your friend, friends do not indebt their friends, friends do not steal money ie taxes & inflation, and your friends do not lie to you about everthing. CPI, Unemployment rates, new job stats, and of course long forgotten campaign promises.

 Now that we have that straight, your friends should perhaps educate you about debt and compound daily interest and how punishing it can be deep into your life. 

Who do you blame? the Bankers, the Gov for allowing this to happen, or the People that just sat back, drank beer, and watched Hockey and then wondered why the SHTF.

Who do you blame for the Gov Debt that is out of control in every country, the Gov or the people that are too busy with Hockey or football or the many other sports that distract you so the Gov can give you the shaft, by indebting your children and grandchildren.

 It is time to Elect the best Candidate, and never turn your back on them, take turns making and keeping them accountable, make sure those campaign promises are fulfilled or replace them. 

Then it's time for beers!

 

 

 

Kprime's picture

Why are so few people wide and awake in this world?

cuz it's past midnight?

Yen Cross's picture

 I'm smoking a big fat  "poorly wrapped"  Macanudo Boichez!