This page has been archived and commenting is disabled.
Why The BRICs Are Less Worried About The Next Crash
When even Jamie Dimon warns that "another crisis is coming", and points to the utter lack of market liquidity and the likelihood of another flash crash, it probably means that not only has he been reading this website, but that JPM's chief prop trading group, the Chief Investment Office, infamously long three years ago is already short and just waiting for the bottom to fall out of the market. One group, however, that is not be too worried about the next global financial crash - at least superficially - are the BRICs, because according to the Russian Prime Minister Dmitry Medvedev, "the creation of the BRICS reserve currencies pool worth $100 billion will allow member states to depend less on negative processes in the world economy and bypass market volatility."
"Along with the launch of the New Development Bank, it is one of the most important initiatives for countries entering into this association. The agreement establishing a pool of reserve currencies was signed last summer," said Medvedev at a government meeting Thursday.
"Each of the BRICS members may apply to any party to the treaty for loan,” Medvedev said, adding that key decisions will be taken by the Governing Council, which consists of either finance ministers or central bank governors. Russia will be represented by the head of the Central Bank of Russia Elvira Nabiullina.
"I hope [the agreement on establishing the pool] will not only strengthen our economic cooperation, but also provide the participants of the ‘five’ more independence from the current international financial situation and the problems existing in the international financial institutions," he said adding that it’s one of the most significant practical initiatives of BRICS.
Of course, stating that $100 billion (not USD denominated of course) in equity is a buffer against market or economic shocks in a world in which there is $600 trillion in notional derivatives, and which are one failed counterparty away from confirming (again, the first time being Lehman's bankruptcy) that net is indeed gross in a collateral chain that is only as strong as its weakest link, is supremely naive especially since the BRICs themselves are loaded to the gills with trillions in USD-denominated debt.
Unless, of course, what the Russian PM is suggesting is that the currency pool will provide the "fresh start" equity in a new, post-dollar world, in which any debt denominated in dollars is nullified once the crisis strikes. Of course, for that to happen, it would mean that the USD is no longer the world's reserve currency. Which is, of course, the unspoken message here (and one which would promptly explain China's ravenous gold buying in recent years).
On Wednesday the Government Commission on legislative activities approved the bill on the ratification of the agreement to establish the BRICS reserve currencies pool. The ratification of this agreement will help Russia advance its monetary cooperation strategy, particularly in the development of privileged relations with its partners from BRICS, said the Russian government.
»
- 18807 reads
- Printer-friendly version
- Send to friend
- advertisements -
As BRICS are in the processes to decouple economies from the Western neoliberal monetary monopoly, they could bring back the gold standard as a base for their transactions, which is much more steady than the paper money unstable financial bubbles. They are ready, because they are emerging economies with billions of potential consumer tanks and can attract other countries too being victims of the international financial mafia, like Argentina and Greece.
re: Jamie Dimon "it probably means that not only has he been reading this website..."
I hope he has. Then he'll know what we all think of him.
Dibs on the cufflinks when he loses his head.
Best you can hope for is Javier Martin-Artajo's cufflinks.
A picure is worth a thousand fuck you Jamies...
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com
And the AIIB and the Shanghai Cooperation Organization
They ain't worried none neither
The US must be barred from any new financial organization, until they collapse.
lets noe forget its sister BOE
This American (well, subject of a zionist occupation regime) agrees with your assessment.
This Ohio citizen and secondly an American also agrees with your assessment.
Time for Article V state legislature run Convention to terminate Washington, D.C.
Downvote for you. I really cannot understand why so many dopes around this website have spontaneously begun to think that a US Constitional Convention will solve anything. Politicians (See: Criminals) collectively voting in a supermajority to end their means of power and plunder? Fucking get real.
100 billion in real hard earned money must worth a few trillion in USD... what ever new money comes along shall be expensive
no doubt a goldman alum is appointed to run the thing
$100B in hard earned debt. Does not exist, will never be there, is just part of the Ponzi called "the economic system". Fuck this
That's a small pool in a big pond.
Here are some more signs of a coming recession.
http://michaelekelley.com/2014/12/20/leveraged-loans-predict-crash/
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
http://michaelekelley.com/2015/02/24/would-you-pay-39-more-than-asked/
http://michaelekelley.com/2015/03/24/stocks-could-have-worst-april-since-1970/
Here is how to prepare yourself.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Good luck!
timing is everything, isn't it? the brics set up a bailout bank just in time for a bailout.
the sometime forgotten end to the theory of bad money is that the bad money gets so bad it has to be replaced. sovereign currencies are simply reissued with a new valuation. reserve currencies are replaced by another reserve currency. the real was replaced by the pound sterling. the pound sterling was replaced by the dollar. the dollar will be replaced by a currency proxy like the sdr or, in a new twist, a new bank of settlements with a floating single rate as a function of all member currencies backed by gold settlement guarantees. the brics bank is the place to put your money to store value.
the dollar is done. the usa will find itself a welfare state like post ww2 britain, not bottoming for at least one generation and not going very far from there for a very long time.
Less worried about the next crash than who? The US?
Kinda obvious. THEY have a plan B. THEY will pick up and start anew whereas..the decline of the us fucks mainly..the us. Thats all folks.
There are hundreds of 19/20th century 'usa's ' just waiting to be brought up to speed.
Why everbody thinks that just 1 pesky country goes down the shitter means end of world is beyond me.
Thats not to say however that the US wont go without a fight.but mark my words..shes goin down..and EVERYBODY knows it..except the american sheeple. The important US people know..and are prepared. If you dont..your an idiot..cuz its been on the wall since early to mid 80's.
Those who wage wars outside of their country, will suffer immense collective karmic retribution in myriad forms -- Nichiren Daishonin,.1253
Chinese margin account anyone?
We abducted Jamie Dimon and analyzed his exact chemical processes down to their subatomic particles for a period of 4 days on Q99X2 and then sent him back to earth to his own time. We could not distinguish the difference between him and the Corriente cattle taken from Utah.
It's all Talk, until they re-quote the Reserve in Tons of Gold.
Quoting Elastic Currency (Relative Reference Frame) means little these days, unless and until it's indexed to an Absolute Currency (Absolute Reference Frame).
To use an analogy... Just as we use the GPS (Global Positioning System) for navigation, we need to use a GPS for currencies: The Gold Pricing System.
Use gold as the only international currency
be safe
"Unless, of course, what the Russian PM is suggesting is that the currency pool will provide the "fresh start" equity in a new, post-dollar world, in which any debt denominated in dollars is nullified once the crisis strikes. Of course, for that to happen, it would mean that the USD is no longer the world's reserve currency. Which is, of course, the unspoken message here (and one which would promptly explain China's ravenous gold buying in recent years). "
isn't this a typical "American Gold Bug" theory? At the same time typically American and typically Gold Bug?
bear with me. the author is writing about the AIIB as if it was part of one single-minded plan with one single-minded outcome
that's the way a hegemon thinks. one used to have plenty of power. in Eastern terms, that's a "Yang"-Strategy. The UK used to be able to do that, and later the US
but it's not the way neither Europeans nor EuroAsians nor Asians think, or can afford to think and strategize
a "Yin"-Strategy is different. it entails being prepared for several outcomes, and several scenarios
in one scenario, the USD suffers a violent collapse. in another, gold returns, in a further other, the decline is relatively smooth, and the AIIB is just the institution to pick up the "slack" from the World Bank
and those are only a few, and they can overlap
the outcome of the current battles about the IMF reforms is, for example, still unclear. and, interestingly, a taboo theme on ZH
ignorance or "something that might not be mentioned"? or just a publishing strategy mired at being gentle with the "political demography" of ZH readers?
http://www.globalresearch.ca/brics-and-the-fiction-of-de-dollarization/5...
The financial media as well as segments of the alternative media are pointing to a possible weakening of the US dollar as a global trading currency resulting from the BRICS (Brazil, Russia, India, China, South Africa) initiative.
One of the central arguments in this debate on competing World currencies hinges on the BRICS initiative to create a development bank which, according to analysts, challenges the hegemony of Wall Street and the Washington based Bretton Woods institutions.
More recently, emphasis has been placed on the role of China’s new Asia Infrastructure Investment Bank (AIIB), which, according to media reports, threatens to “transfer global financial control from Wall Street and City of London to the new development banks and funds of Beijing and Shanghai”.
While the creation of BRICS has significant geopolitical implications, both the AIIB as well as the proposed BRICS Development Bank (NDB) and its Contingency Reserve Arrangement (CRA) are dollar denominated entities. Unless they are coupled with a multi-currency system of trade and credit, they do not threaten dollar hegemony. Quite the opposite, they tend to sustain and extend dollar denominated lending. Moreover, they replicate several features the Bretton Woods framework.
Towards a Multi-Currency Arrangement?
What is significant, however, from a geopolitical standpoint is that China and Russia are developing a ruble-yuan swap, negotiated between the Russian Central Bank, and the People’s Bank of China,
The situation of the other three BRICS member states (Brazil, India, South Africa) with regard to the implementation of (real, rand rupiah) currency swaps is markedly different. These three highly indebted countries are in the straightjacket of IMF-World Bank conditionalities. They do not decide on fundamental issues of monetary policy and macro-economic reform without the green light from the Washington based international financial institutions.
Currency swaps between the BRICS central banks was put forth by Russia to:
While Russia has formally raised the issue of a multi-currency arrangement, the Development Bank’s structure does not currently “officially” acknowledge such a framework:
India, South Africa and Brazil have decided not to go along with a multiple currency arrangement, which would have allowed for the development of bilateral trade and investment activities between BRICs countries, operating outside the realm of dollar denominated credit. In fact they did not have the choice of making this decision in view of the strict loan conditionalities imposed by the IMF.
Heavily indebted under the brunt of their external creditors, all three countries are faithful pupils of the IMF-World Bank. The central bank of these countries is controlled by Wall Street and the IMF. For them to enter into a “non-dollar” or an “anti-dollar” development banking arrangement with multiple currencies, would have required prior approval of the IMF...
...Moreover, with regard to India, Brazil and South Africa, their membership in the BRICS Development Bank was no doubt the object of behind closed doors negotiations with the IMF as well as guarantees that they would not depart from the “Washington Consensus” on macro-economic reform.
Under a scheme whereby these countries were to be in be in full control of their Central Bank monetary policy, the contributions to the Development Bank (NDB) would be allocated in national currency rather than US dollars under a multi-currency arrangement. Needless to say under a multi-currency system the contingency CRA fund would not be required.
The geopolitics behind the BRICS initiative are crucial. While the BRICS initiative from the very outset has accepted the dollar system, this does not exclude the introduction, at a later stage of a multiple currency arrangement, which challenges dollar hegemony.
=========
This is a lengthy and interesting read.
Well indeed, the dollar seems to be not only surviving but thriving. Beats me given the phenomenal rate of dollar printing. Lack of an alternative currency must be a major factor.
http://in.reuters.com/article/2015/04/10/india-gold-temples-idINKBN0N02B...
(Reuters) - The two-century-old Shree Siddhivinayak temple in Mumbai devoted to the Hindu elephant-headed god Ganesha bristles with close circuit cameras and is guarded by 65 security officers.
It is one of India's richest temples, having amassed 158 kg of gold offerings, worth some $67 million, and its heavily guarded vaults are strictly off limits.
India is the world's biggest consumer of gold and its ancient temples have collected billions of dollars in jewellery, bars and coins over the centuries - all hidden securely in vaults, some ancient and some modern.
A few years ago a treasure of gold worth an estimated $20 billion was discovered in secret subterranean vaults in the Sree Padmanabha Swamy temple in Kerala.
Now, Prime Minister Narendra Modi wants to get his hands on this temple gold, estimated at about 3,000 tonnes, more than two thirds of the gold held in the U.S bullion depository at Fort Knox, Kentucky, to help tackle India's chronic trade imbalance.
Modi's government is planning to launch a scheme in May that would encourage temples to deposit their gold with banks in return for interest payments.
The government would melt the gold and loan it to jewellers to meet an insatiable appetite for gold and reduce economically-crippling gold imports, which accounted for 28 percent of India's trade deficit in the year ending March 2013.
India's annual gold imports of 800 to 1,000 tonnes could be cut by a quarter if temples decided to participate in the scheme, say government and industry sources.
I guess we now know who the States are going to war against next.
BRIIICS........bitchez