BRICS Announce $100 Billion Reserve To Bypass Fed, Developed World Central Banks

Tyler Durden's picture


As we suggested last night, the anti-dollar alliance among the BRICS has successfully created a so-called "mini-IMF" since the BRICS are clearly furious with the IMF as it stands currently: this is what the world's developing nations just said on this topic "We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness."

As Putin explains, this is part of "a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies." Initial capital for the BRICS Bank will be $50 Billion - paid in equal share among the 5 members (with a contingent reserve up to $100 Billion) and will see India as the first President. The BRICS Bank will be based in Shanghai and chaired by Russia. Simply put, as Sovereign Man's Simon Black warns, "when you see this happen, you’ll know it’s game over for the dollar.... I give it 2-3 years."


A quick take on existing monetary policy.


The punchline, however, is that using bilateral swaps, the BRICS are effectively disintermediating themselves from a Fed and other "developed world" central-bank dominated world and will provide their own funding.

We are pleased to announce the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$ 100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements.... The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures. 

Incidentally, the role of the dollar in such a world is, well, nil.

For those who have forgotten who the BRICS are, aside from a droll acronym by a former Goldman banker, here is a reminder of the countries that make up 3 billion in population.

Key excerpts from the Full statement:

We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness. The IMF reform process is based on high-level commitments, which already strengthened the Fund's resources and must also lead to the modernization of its governance structure so as to better reflect the increasing weight of EMDCs in the world economy. The Fund must remain a quota-based institution. We call on the membership of the IMF to find ways to implement the 14th General Review of Quotas without further delay. We reiterate our call on the IMF to develop options to move ahead with its reform process, with a view to ensuring increased voice and representation of EMDCs, in case the 2010 reforms are not entered into force by the end of the year. We also call on the membership of the IMF to reach a final agreement on a new quota formula together with the 15th General Review of Quotas so as not to further jeopardize the postponed deadline of January 2015.


BRICS, as well as other EMDCs, continue to face significant financing constraints to address infrastructure gaps and sustainable development needs. With this in mind, we are pleased to announce the signing of the Agreement establishing the New Development Bank (NDB), with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies. We appreciate the work undertaken by our Finance Ministers. Based on sound banking principles, the NDB will strengthen the cooperation among our countries and will supplement the efforts of multilateral and regional financial institutions for global development, thus contributing to our collective commitments for achieving the goal of strong, sustainable and balanced growth.


The Bank shall have an initial authorized capital of US$ 100 billion. The initial subscribed capital shall be of US$ 50 billion, equally shared among founding members. The first chair of the Board of Governors shall be from Russia. The first chair of the Board of Directors shall be from Brazil. The first President of the Bank shall be from India. The headquarters of the Bank shall be located in Shanghai. The New Development Bank Africa Regional Center shall be established in South Africa concurrently with the headquarters. We direct our Finance Ministers to work out the modalities for its operationalization.


We are pleased to announce the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$ 100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements. We appreciate the work undertaken by our Finance Ministers and Central Bank Governors. The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures.

Goodbye visions of an SDR-world currency. As for the USD...

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Tue, 07/15/2014 - 14:40 | 4959918 PacOps
PacOps's picture

Faster please.

Tue, 07/15/2014 - 14:46 | 4959944 Manthong
Manthong's picture

The Rooskies will have a lot of fun sticking it to the Fed.

Tue, 07/15/2014 - 14:53 | 4959992 Pladizow
Pladizow's picture

Martin Armstrong: Killing the dollar

The recent attempts by the USA to impose huge fines on foreign banks for violating US sanctions with Iran based solely on transactions in dollars is having the same impact as FATCA. The US Justice banking penalties are becoming a threat to the dollar being used in such transactions. While this is unlikely to cause the decline in the dollar as a reserve currency, for transactions, firms and banks are starting to plan to replace the US dollar as a trading currency. This growing fear of the future penalties from the US authorities is starting the process in motion whereby we will eventually move to a new international reserve currency.

The efforts of Russia and China to establish trade in their currencies is interesting but not a threat to the reserve status of the dollar. That is separate and distinct from the trading status of the dollar. One can trade in any currency, but where do you park money? That can still only be the dollar where there is a deep market (reserve). So we must separate the dollar into these two primary categories – trade and reserve. They perform two distinct functions. The Euro never got off the ground as a reserve currency and is second to even the Chinese yuan in trade. Because the Euro would not create a consolidated debt, they prevented the second prong from forming – the place to park money.

You can conduct trade in yuan, but you cannot park trillions of dollars in yuan or rubles no less euros. So you trade in whatever you like, but you convert to dollars to bank it. Major banks can switch out of dollars to for any transaction thereby avoiding US sanctions. After the transaction takes place, the parties can flip into dollars to park it. The US Justice Department will then be defeated.

Nevertheless, FATCA and the drive to punish foreign banks with billions in fines for acts outside the USA is creating the subtle shift toward a world currency at the reserve level for trade and parking. This trend is in motion always. Whatever these people can do to serve their personal interests will set in motion the ultimate drive to a new world reserve currency that cannot be based upon any single nation.

Tue, 07/15/2014 - 15:00 | 4960029 ilion
ilion's picture

I always admire the BRICS in talking about the demise of the dollar but at the same time they establish a fund that is based in US dollar.

Tue, 07/15/2014 - 15:02 | 4960040 Tjeff1
Tjeff1's picture

No they did not.  The amount is the equivalent of USD.  Not in USD.

Tue, 07/15/2014 - 15:05 | 4960061 Xibalba
Xibalba's picture

Based on the price of paper metals, this is obviously obvious.  

Tue, 07/15/2014 - 15:23 | 4960146 SoberOne
SoberOne's picture

Will this be a catalyst for moar woar?

Tue, 07/15/2014 - 15:46 | 4960244 Killer the Buzzard
Killer the Buzzard's picture

Why not park it in physical gold instead of USD?

Tue, 07/15/2014 - 15:53 | 4960278 THX 1178
THX 1178's picture

Sorry James Rickards, no SDR for you.

Tue, 07/15/2014 - 16:00 | 4960306 outamyeffinway
outamyeffinway's picture

BRICS leaders are also expected to sign an agreement to establish an additional $100 billion fund to steady the currency markets.

"We have reached an agreement that, in the current conditions of capital volatility, it is important for our countries to have this buffer a so-called “mini-IMF”- a financial organization which could quickly react to capital outflow, providing liquidity in hard currency, in particular in US dollars,” Siluanov said.


Tue, 07/15/2014 - 16:07 | 4960336 THX 1178
THX 1178's picture

Now that the conceptual infrastructure is in place, a collapse could easily be a catalyst for massive expansion of the size of this reserve.

Tue, 07/15/2014 - 16:19 | 4960347 Save_America1st
Save_America1st's picture

Jim Willie's been on this story for well over a year now...probably a year and a half.  The 100 Bill is old news and was just the seed money to get it started.  It's going to become the BRIICS gold central banking system for international trade settlement.  They will re-monetize gold for trade in goods by-passing the dollar or they will establish trade via other currencies.  But the goal is to start backing their trades and/or individual currencies with gold. 

The caveat is this, however:  They still need to continue slowly extricating themselves from as much of their U.S. dollar and bond holdings as possible so that they don't start a fucking avalanche and everyone start running and screaming from the theater all at the same time.  That way they can also continue to buy gold for cheap dollars.

But when the day comes and they're all wired together with their own version of SWIFT and everyone is ready to rock, then that's when they will flip the switch on the dollar.  They will all have to dump it at the same time so the transition occurs in one move basically over a weekend.

Don't think the Feds aren't aware of this.  It's been well documented and it's not like they haven't been instrumental in pushing for this to happen as well.  It helps bring down the American economy and our society all at once and that's when the bad guys in charge will make their move to take over the country.

After this happens, Americans are going to wake up on a Monday morning living in an entirely different America.  An entirely different world.  Where the dollar is actually dead and nobody will want it, not even Americans.  Life in this country as we thought we knew it will be long gone to the dustbin of history.

It's still may be a while...I've been guessing sometime just before the end of obama's term in 2016.  That's as good a time as any for these scumbags to make their move. 

Keep stackin' and preparing's going to get wild.

Tue, 07/15/2014 - 16:29 | 4960412 gh0atrider
gh0atrider's picture

"Central banking was such a disaster for the west, let's do it here too!"

Tue, 07/15/2014 - 17:13 | 4960534 remain calm
remain calm's picture

Nobody should get a boner over this, it will take years to get this up and runnimg, but in 10 years this could be viable.

Tue, 07/15/2014 - 17:59 | 4960651 J S Bach
J S Bach's picture

It has officially begun.  The formerly sap-nations of the world - for so long under the usurious thumb of the International banksters - have declared their independence.  Maybe some day, historians in their lands will compare July 15th, 2014 to our July 4th, 1776.

Tue, 07/15/2014 - 18:54 | 4960814 johngaltfla
johngaltfla's picture

Man, you have to love Putin. Not only is he fucking Obama over a barrel, he's doing so while flaunting his military in our face while we send 30+ year old fighter planes in small numbers to defend the bankster slave nations in Eastern Europe!


NATO has Intercepted Russian Aircraft up to 50 Times in Recent Weeks!

Tue, 07/15/2014 - 19:10 | 4960875 MeMadMax
MeMadMax's picture

Does the BRICS treaty include military support in the event the Central Banksters decide they want to act like a bunch of spoiled brats at even the mere thought of competition?


If so, I'm in.



Tue, 07/15/2014 - 19:29 | 4960932 johngaltfla
johngaltfla's picture

Yes. China will stop shipping electronic components to the West and our military will be PARALYZED.

Tue, 07/15/2014 - 19:51 | 4960984 MeMadMax
MeMadMax's picture

Still need to break the "Petro" part of the "Petro-Dollar" however.


Once one or more OPEC countries are in then the world will be all in...


And the sooner the better....

Tue, 07/15/2014 - 19:52 | 4960987 johngaltfla
johngaltfla's picture

Saudi already accepts the Yuan as does Iran. It will take a public repudiation by the BRICS...

Tue, 07/15/2014 - 22:27 | 4961081 Save_America1st
Save_America1st's picture


Hey...also keep an eye on this aspect:  The Amero

I know it kinda fell out of fame a few years back, but don't think it's gone for good.  The world is moving away from the dollar, no doubt about it.  They already have the Euro.  They're starting up the BRICS.  Don't forget that the BRICS isn't just 5 or 6 countries; it's actually nearly 100 other countries that have signed onto their system.  Don't lose sight of that.

Who is left out of those 2 systems?  The U.S., Canada (have you heard of Canada signing on to anything else yet? NO), and Central America.

Who is currently being allowed to invade North America?  Central America.

What's the next step to this open border bullshit and a 3rd world decline of North America?  The Amero currency to "compete" with the Euro and whatever the BRICS are going to do.

Once this all finally goes through, don't be surprised if they try to fuck us over with another fiat currency beyond the dollar by bringing back the "Amero", because they will try to sell it as Canada, U.S. and Mexico/Central America will need to "unite" to compete against the 2 other big regional monetary systems. 

One step closer to a one world government and one world monetary system if the sociopath, anti-human, scum of the Earth win and consolidate the planet into these 3 regions.

This Ameio bullshit is not dead...mark my words, they will bring it back Hegelian Dialectic-style...they will let the the dollar totally crash and then bring this Amero currency up as a way to "bring the North American Union" back to prominence in and "trust", blah, blah, blah, blah in order to compete with the 2 other world monetary systems.

It'll just be another WWF fake wrastlin' deal, coke vs pepsi, mickey dee's vs booger king, etc. etc. etc....and they will continue to try and keep the game playing on and on an on...

All at the expense of the liberty and freedom of all of humanity and especially the American sheeple who are so apathetic and indoctrinated into the Free Shit Army that the traitors of our country who are trying to pull this off against us think that it all just might work. 

just sayin'...

Tue, 07/15/2014 - 22:56 | 4961490 teslaberry
teslaberry's picture

seriously, there are so many dollars in mexico and central and south america-----they would just ALL dollarize . it's easier, it fucks over the peasantry in all countries concerned more effectively ---especially americans using dollars. 


it's just easier and more palatable to roll out. no need for an 'amero' is just dollarization as usual. serious fucking inflation---and subsequent inevitable remintance recycling flow---the drugs come into the u.s and the profits get cycled back out to the mexicolumbians. 


save america 1st, baby, i love you, but you're too narrowly predicting the path of the dialectic. there are a myriad of manners in which the dialectic of transnationalism can be pushed forward. ultimately the common thread is MORE TRADE, MORE RESOURCE EXPLOITATION, MORE LABOR MOBILITY ACROSS BORDERS, MORE REMITANCE OF DOLLARS OUT OF THE U.S. . 


Those are the unspoken , patterns--the threads of transnational integration. but the 'overt' made for television narrative is just a series of various screenplays that help layer those over. 


Tue, 07/15/2014 - 23:22 | 4961549 Four chan
Four chan's picture
i guess once you remove the tangible asset thing from the value of money anyone can be a central bank with unlimited "lol reserves". 

what do you think guys, wanna be a new central bank? we could call it the federal reserve of zero hedge, catchy ring to to it i think.

Wed, 07/16/2014 - 00:40 | 4961699 A Dollar Short
A Dollar Short's picture

You amuse me, Save_America 1st, I'm right on board.


No American politician says it in writing or tracable email but - ONE WORLD ORDER IS WHERE THEIR HEADS ARE!


I say, their heads are up their Fucking ass..


just sayin"

Tue, 07/15/2014 - 20:31 | 4961087 mjcOH1
mjcOH1's picture

"The Rooskies will have a lot of fun sticking it to the Fed."

I see a picture with ministers of 5 countries whose currencies I wouldn't touch with a stolen dick.   You have to admire the audacity.....they see the dollar has no cloths, is still bought hand over fist, and want a piece of that action.   But about a marraige of mongoloids.    If the 'the dollar is fiat being devalued post-haste by a government with no stability' line has some appeal (which it should)....consider a front man before trotting out this group to offer as an alternative of prudance, stability, and reasoned decision making.

Tue, 07/15/2014 - 21:12 | 4961195 kaiserhoff
kaiserhoff's picture

Hail yes.  Every one if these fuckers already has plans to borrow the whole 100 billion, and MOAR!

Tue, 07/15/2014 - 22:10 | 4961366 Save_America1st
Save_America1st's picture

I'd like to know who would down vote my post.  Give me your reason why and your opinion on what's going to happen.

You don't have a fucking clue.



Tue, 07/15/2014 - 23:00 | 4961505's picture

Didn't downvote your post, but the Amero is out because Bitcoin is in.  Do some homework, starting here:

Tue, 07/15/2014 - 23:30 | 4961571 7.62x54r
7.62x54r's picture

If you don't offend enough people here to get at least one downvote, you aren't doing it right.

Wed, 07/16/2014 - 01:50 | 4961787 putaipan
putaipan's picture





Wed, 07/16/2014 - 00:05 | 4961642 teslaberry
teslaberry's picture

i gave you  a long reason. i think youre head is in the right direction, but like gerald celente and others you are thinking to narrow about predictions about the dialectic. 








Tue, 07/15/2014 - 22:15 | 4961388 allgoodmen
allgoodmen's picture

... as you type on your Chinese made computer with Indian software... somebody's fucked them out of the real vslue of their goods & labor & I think the point is they've had enough

Tue, 07/15/2014 - 20:29 | 4961078 Save_America1st
Save_America1st's picture


Tue, 07/15/2014 - 21:10 | 4961191 bitterwolf
bitterwolf's picture

Pretty much. I used to believe in the scenario, make 3 regional power blocs than consolidate into one, now I think the global elite blocs are infighting less and the pace of change is picking up for one BIG move with all the regional agreements already in  place as "transfer mechanisms" to facilitate dramatic change .All they need is some HUGE event/problem  for cover and bamm one world curreny,one global fed with member banks being europe, china,india ,brazil etc. Global governance is another matter entirely and we( 1st/2nd world) will always have the "arc of instability" and transnational crime and terrorist actors

Tue, 07/15/2014 - 21:36 | 4961247 Save_America1st
Save_America1st's picture

They're working on it from so many multiple levels and so may angels against us that for the 99% it's pretty much incomprehensible.

I'm of the mind that at this point...even though those of us know to stack phyzz, stack supplies, and prepare the best we can...there's no stopping this tragectory. 

The majority of the sheeple are totally mind-wiped.  Most of them have their heads up Kim Kardashians big dimply sick fat ass, and they love it more than the reality of life itself. 

So fuck'em...we know what's right.  We know what will change things and what will work.  An original Constitutional society as the original Framers intended. 

But my just ain't gonna happen.  Those who are in charge are sociopaths and

It's not going to stop.  Out best chance at beating them is to let it collapse and then fight those psycho mother fuckers with all we've got until we completely eradicate them from the fucking face of the Earth and make such an example out of them, via the Constitution, Bill of Rights, Magna Carta, and all literature of true freedom and liberty, that those sociopath scumbags will never have a snowballs chance in hell of ever, ever, ever, ever, ever, ever, gaining any fucking power and control again over the sovereign people of this planet.

AND IF THEY TRY.  WE KILL THEM WITH EXTREMEM PREDJUDICE IN ANY WAY POSSIBLE AS TRAITORS AGAINST THE FREEDOM AND SOVEREIGNTY OF THE INDIVIDUAL PEOPLE AND SOCIETIES OF THIS PLANET. the last centurty, these sociopathic, homicdial, psychopatic scumbags are responsible for the all out murder of over 250,000,000 (milllion) innocent, non-combative people on this planet.






Tue, 07/15/2014 - 22:12 | 4961378 Save_America1st
Save_America1st's picture

I'd like to know who would down vote my post.  Give me your reason why and your opinion on what's going to happen.

You don't have a fucking clue.



Wed, 07/16/2014 - 01:31 | 4961766 falconflight
falconflight's picture

I try to remind people that many of the most vocal of posters are CAIR rectum snooters and left hand sniffers, with a mix of racial leftists, and some RonBots...those whom dig him really only because there's some JewHaters on his team.  I couldn't agree more with your points stated in your previous post.  Connecting the dots for these ZH'ers is always to same: Jooossssss and puppets of the Jooosssssss.

Tue, 07/15/2014 - 23:04 | 4961494 palmereldritch
palmereldritch's picture

Just like when the Black Hand delivered the assassination of Franz Ferdinand triggering WWI and the erasure of Europe's regional political structures (read:aristocracies) there will most probably be a similar political spark to detonate the present debt overhang and demolish regional financial structures (read: sovereign national currencies) in the hemispheres. 

This time the controlled implosion will attempt a trifecta: borders, currency and liberty.

Wed, 07/16/2014 - 04:22 | 4961885 NMFP
NMFP's picture

No need to worry about OPEC, America's going to be energy independent soon. All you've got to do is HOPE!

Tue, 07/15/2014 - 20:29 | 4961080 bitterwolf
bitterwolf's picture

not so much.backers of the age old dream labor on another level.

Wed, 07/16/2014 - 09:45 | 4962360 123dobryden
123dobryden's picture

better say, well known CLEPTOCRACIES declared their financial independence from the  biggest ONE.

why you mess something so abstact as a nation into it?

i dont think we should go that far in history in comparing, i have a better date, the date IMF itself started, now it has a competitor

Tue, 07/15/2014 - 18:08 | 4960678 Peanut Butter E...
Peanut Butter Engineer's picture

FED will always and continuously buy the dollars if USD were to be dump globally.

Tue, 07/15/2014 - 19:18 | 4960897 nidaar
nidaar's picture

Won't make much of a difference because no one will give a shit about FED and its confetti by then.

Instead, the question will become how US can get rid of FED and get into the new system, which will become the new standard.

Think of it like FIFA and the US soccer league...

Tue, 07/15/2014 - 22:43 | 4961452 delacroix
delacroix's picture

buy with what? more dollars.

Wed, 07/16/2014 - 10:28 | 4962514 THX 1178
THX 1178's picture

Buy bonds with dollars. Think of the bonds as currency with a non-zero maturity date and non-zero yield. Think of the currency as bonds with a maturity date of zero units time and coupon of zero %. Since money is debt, cash and bonds are essentially the same thing- a matter of degree not kind.

Wed, 07/16/2014 - 00:26 | 4961679 flapdoodle
flapdoodle's picture

The Indians are wise to that trick - they used to have a Prime Minister who would drink his own piss...

Tue, 07/15/2014 - 19:19 | 4960910 Kirk2NCC1701
Kirk2NCC1701's picture

I'm glad that this statistician (JW) caught on to a story that the BRICS have been cooking for years.  What were the odds of bloggers eventually glomming on to this?  IOW... "Success has many fathers, failure but one".

Keep stacking.

Wed, 07/16/2014 - 01:49 | 4961785 FreedomGuy
FreedomGuy's picture

I have also wondered that with the new aggressive and even hostile US infiltration into foreign banks, disclosure of assets and accounts...if this does not further foster an anti-USA, anti-dollar desire on the part of many nations.

In an effort to directly control all bank accounts tied to Americans and trading it indirectly controls foreign banks and their transactions.


Tue, 07/15/2014 - 16:12 | 4960350 Liberal
Liberal's picture

How do I apply for welfare from BRICS?

Do NOT follow this link or you will be banned from the site!