BRICS Bank Officially Launches As Sun Sets On US Hegemony

Tyler Durden's picture

Before the Asian Infrastructure Investment Bank and, to a lesser extent, the Silk Road Fund became international symbols for the end of Western economic hegemony, there was the BRICS Bank.

Or at least there was the idea of the BRICS bank. 

The supranational lender imagined by Russia, China, Brazil, India, and South Africa is, like the AIIB, largely a response to the failure of US-dominated multilateral institutions to meet the needs of modernity and offer representation that’s commensurate with the economic clout of their members. As Bloomberg points out, the countries’ combined economic output is now roughly equal to that of the US. “Back in 2007, the U.S. economy was double the BRICS,” Bloomberg notes.

As a refresher, here’s how the Washington Post described the bank’s structure and purpose on the heels of last summer’s BRICS summit in Fortaleza:

The NDB has been given $50 billion in initial capital. As with similar initiatives in other regions, the BRICS bank appears to work on an equal-share voting basis, with each of the five signatories contributing $10 billion. The capital base is to be used to finance infrastructure and “sustainable development” projects in the BRICS countries initially, but other low- and middle-income countries will be able buy in and apply for funding. BRICS countries have also created a $100 billion Contingency Reserve Arrangement (CRA), meant to provide additional liquidity protection to member countries during balance of payments problems. The CRA—unlike the pool of contributed capital to the BRICS bank, which is equally shared—is being funded 41 percent by China, 18 percent from Brazil, India, and Russia, and 5 percent from South Africa.

On Tuesday, ahead of this year’s summit in Ulfa, the BRICS countries officially launched the new bank along with the reserve currency pool. Here’s WSJ:

The group of five major emerging economies known as Brics launched a development bank on Tuesday ahead of a summit in the Russian industrial city of Ufa, where Russia seeks to demonstrate it hasn’t been isolated by Western sanctions.

 

The long-planned development bank, aimed at financing projects mainly in member countries Brazil, Russia, India, China and South Africa, will select its first projects to finance by the end of the year, Russian Finance Minister Anton Siluanov said on Tuesday. The countries’ national banks also signed a deal Tuesday to create a $100 billion reserve fund by the end of July that can be tapped in financial emergencies.

 

The Bank of Russia said it signed an “operational agreement” with Brics counterparts to create a $100 billion pool of mutual reserves. The group agreed to create the fund in 2013 as an alternative to the International Monetary Fund, after seeing investors pull money away from emerging economies, causing their currencies to weaken.

 

The currency pool would be drawn on by the central banks of Brics states whenever they suffered a shortage of dollar liquidity, helping them maintain financial stability, Russia’s central bank said.

 

China will contribute $41 billion to the currency pool. Brazil, India and Russia will each provide $18 billion, while the remaining $5 billion will come from South Africa.

The BRICS nations will also look to begin settling more trade in national currencies, a shift we highlighted recently in “The PetroYuan Is Born: Gazprom Now Settling All Crude Sales To China In Renminbi”, “PetroYuan Proliferation: Russia, China To Settle "Holy Grail" Pipeline Sales In Renminbi,” and “De-Dollarization Du Jour: Russia Backs BRICS Alternative To SWIFT.” This comes at a convenient time for Russia, which is attempting to diversify away from the dollar amid Western economic sanctions (recently extended into next year) imposed on Moscow in retaliation for the Kremlin’s perceived involvement in Ukraine. RT has more:

BRICS countries will definitely start using their local currencies for mutual settlements quite soon, the head of Russia’s VTB bank Andrey Kostin told RT Wednesday at the BRICS summit in Ufa.

 

“We definitely see a growing interest from the countries to make settlements in local currencies,” the CEO of Russia’s second biggest bank said. 40-50 percent of all the mutual settlements among the BRICS countries can be performed in domestic currencies, Kostin estimated, RIA reported.

 

The Chinese yuan as the leading currency can be used in settlements among BRICS member states, Kostin said, adding that the Russian ruble can be used for that as well.

 

He says there will be a growing interest from leading Russian exporters to the process of switching to national currencies.

 


And of course no story about the BRICS bank (or the AIIB for that matter) would be complete these days without some mention of Greece and the possibility that Athens may be forced to look elsewhere for help in the event it's driven out of the euro and Jean Claude-Juncker's "humanitarian" plan B proves inadequate to keep the country out of the Third World after Berlin digitally bombs its citizens back to barter status. For today's Russian/Chinese pivot allusion, we go to IBTimes

Greece could get financing from the New Development Bank operated by Brazil, Russia, India, China and South Africa (BRICS) if it buys a few shares of the institution to become a member. The bank, which is set to begin operations next April, is seen an alternative to Western financing.

 

Deputy Russian Finance Minister Sergey Storchak said becoming a part of the bank would require Greek officials to make a political decision.

 

"We do not have any co-relation between a contribution and an amount of funding,” Russian news agency Tass quoted Storchak as saying. “There is general agreement that the system of the countries’ assets will be balanced."

 

Russian Finance Minister Anton Siluanov said Tuesday it is necessary for the new bank to "carve out a niche" since competition among international banks is intense.

Yes, the bank must "carve out a niche", and preferably one which takes every opportunity to undercut the influence of the US-dominated multilateral institutions that have defined the post-war world and served to underwrite six decades of dollar dominance. 

So we suppose it's not all bad news for China these days. Beijing may have a decelerating economy and a stock market collapse on its hands, but at the end of the day, the country now controls not one (AIIB), not two (Silk Road Fund), but three (BRICS bank) development banks, which gives Xi Jinping quite a few options when it comes to embedding the yuan in global investment and trade which, in the long-run, is far more important than where the SHCOMP closes on Thursday. 

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Almost Solvent's picture

Holy Fuck. USA is done. Toast.

 

goD! Why have you foresaken us to these goddamn cocksucking bankers?!

 

In other news, WW3 is right on schedule. Hopefully it's just the cockroaches & jellyfish left when it's over.

TeamDepends's picture

Herding the lemmings into the kill net. Sure, your money is safe here.

Pool Shark's picture

 

 

No fan of the US $ here, but a bank based on the fiat currencies of China, Brazil, Russia and India?

What could possibly go wrong?

 

Good luck with that...

 

TruthInSunshine's picture

Zero Hedge has done good exposes & journalism before (even groundbreaking journalism & analysis, i.e. HIgh Frequency, Dark Pools, etc.), but is FULL OF SHIT and reads like Russia Times on this BRIC Bank bullshit.

The U.S., diseased as it may be, is far stronger than Ebola stricken China, India, Russia & Brazil.

Long USD.

Manthong's picture

Once again, I would like to take this auspicious occasion to give heartfelt thanks to the Fed, the ECB, the IMF, the World Bank and particularly the U.S. government and the EU technocrats for completely F’ng up the world monetary order, pissing away your advantages and forcing the BRICS and their emerging nation supporters to give you the finger and tell you to go pound sand.. which you seem to be doing aggressively in the Middle East.

Save_America1st's picture

First country to take loans from the BRICS and AIIB will probably be China to prop up it's tanking markets and eroding GDP

nosam's picture

India is going to sign the FATCA treaty this month. India is fukushimad too.

pretty bird's picture

The BRICs aren't doing anything.  All those nations are 2nd teir loser states.  Who writes this garbage?

Arnold's picture

May you have many corruption free days at your birth.

 

--New Chinese Saying

weburke's picture

the split is to corral all the nations into the pheonix after the now starting fire. permanently. 

ZerOhead's picture

+1000  North America is still the BEST fucking horse in the glue factory by far. Close second will be South America.  Lower down is Europe and then China and Asia and I forget the last one.

Get rid of the Globalists and banking scum and we can rebuild.

nosam's picture
nosam (not verified) ZerOhead Jul 9, 2015 12:16 AM

North America is still where its at but going down at breathtaking speed.

Manthong's picture

TIS,

Gold, not electrons, underpins the bond market and all the synthetic crap attached thereto.

If you don’t believe me, go ask that pillar of virtue, Larry Summers or the now walking dead Alan Greenspan.

The dollar has the mo literally because of inertia and tradition.

Show me the gold and then I will decide where the monetary strength lies.

I think that maybe we are trading many electrons for heavy armor right now because we know the monetary strength order will shifting in the near future.

 

 

emersonreturn's picture

TiS,

 

i've learned many things from your postings over the years, however, i think during this turbulent time the tylers have remained exceptional.  nowhere else do you encounter such comprehensive thorough coverage.  fearless, in depth.  i have learned so much from contributers but few touch the consistent clarity provided daily by the tylers.  they are breathtaking in their far reaching research.  we all have tired after 6years but the tylers do not show it.  they continue the good fight.  i am sorry they don't always suit what you desire but take a long deep breath and realize all the good they do.  ;-)

Variance Doc's picture

Dude, I'm not sure if it's a MDB thing, it's so hard to tell with the current status of ZH-lack of truly intelligent articles/posters these days; I rarely read the aricles here anymore because of the the utter bullshit on this site.

Given that, I will proceed.

Your post is one of the most idiotic I've come across. You lack the citation of the tremendous natural resources of Russia and China as well as the immense currency reserves. And yet you conclude all hail the US $? WTF!?!

I've enjoyed your posts over time, but given the qualifier above, you are glacticaly stupid.

edotabin's picture

I don't post much anymore (for a variety of reasons), so it logical that you may not have seen my points concerning this. That being said, I proceed:

Am I supposed to believe the resources that Russia has just popped up 20 days ago? I am certain they were there when it was still the Soviet Union. Perhaps there have been some technological advancements that make extraction cheaper/easier etc. but to suddenly bow to Russia because they have oil is a bit fishy. What about all the nuclear missiles? They didn't disappear with the fall of the Berlin wall, although that is what we were supposed to believe. I sense manipulation at play.

Concerning US hegemony, there are many that wish to see it continue because this is what they have known and based their entire lives on. This happens in a deep, self-serving type fashion that is not easily admitted to others. On the other hand, you have those that are so incensed with what they see happening,  they're willing to throw the US, Europe and "western" way of life out the window for something new. While I understand the underlying cause, I am not certain any guarantees exist that someone else will be better.  There is a good chance it may be worse.

So, despite being deeply disappointed in what is going on in the "West", I am a bit more hesitant to jump on the Putin bandwagon until:

1. He offers a true monetary alternative. Having a bank operating on the same priciples but simply having a different name is not enough for me.

2. He calls out, by name, each and every high level, scheming banker as well as the names of those banks. He should also give specifics as to how they have harmed Russia as well as humanity as a whole.

3. Same as number 2 but with politicians in countries that have a global reach.

Crickets...................

Unless he does these things and makes certain the information is simple enough for everyone to understand, he is seeking to shift power from the US so that he can be the next powerful viceroy. The overlords remain the same. The game continues.

 

 

ZerOhead's picture

Well said!

 

1. Putins money alternative is the CFR's Rockefellers money alternative. 

FACT (Said so himself)

2. Putin will call them out when their hookers and coke arrive at his Spanish Villa in Marbella the most expensive community in Spain. (His next door neighbor is Rod Stewart) 

FACT > http://www.dailymail.co.uk/news/article-2219754/What-WILL-talk-Vladimir-...

Putin is a GLOBALIST.

 

Let's just fix what we have which is still pretty good redesign the financial system to serve the economy rather than having the economy serve the financial system and send the lousy fuckers who destroyed the planet back to somewhere where they can't do as much damage.

I hear Israel is trying to attract new immigrants...

Bananamerican's picture

"The U.S., diseased as it may be, is far stronger than Ebola stricken China, India, Russia & Brazil."

https://www.youtube.com/watch?v=frAEmhqdLFs

datura's picture

it is based on fiat currencies as of yet...but there must be some reason, why Russia, China and India are STILL buying gold like crazy, China even entire gold mines. They are not doing it for fun. 

Arnold's picture

It is cheap, tangible and fungible.

And , when manipulated, looks fabulous on my wrist as a  submariner watchband.

Lea's picture

"No fan of the US $ here, but a bank based on the fiat currencies of China, Brazil, Russia and India?

What could possibly go wrong?"

Why do you think these countries have all been stocking up on gold like there's no tomorrow?

Answer: Gold ain't no fiat.

Kolchak's picture

Backed by something of actual value would be the difference here, the dollar being backed by well you know, shit.

Theosebes Goodfellow's picture

~"Hope and change lol"~

Why does a maniacally gleeful Barack Obama image come to mind? He did warn us that he was going to "fundamentally change this country".

ZerOhead's picture

Herding nations into the NWO is more like it.

The IBTimes heading for the article is >

Greece Can Easily Get Funding From BRICS Bank: Russia
TeamDepends's picture

Belated thanks for redefininggod. It gave as good an answer as we are likely to find about Chinas role in all this. The Chinese will be sold on the NWO by promising they will be "in control" of it. NWO = KILL NET

ZerOhead's picture

You're welcome. It really helps make sense of  the shitshow we are witnessing.

 

JADE HELM  > "Good NWO" AKA China in control  (Just my take on it)

 

It's an inside joke amongst the Globalists just like flashing the Illuminati/Luciferian hand sign.

http://s0.uvnimg.com/univisionaustin/fotos/photo/2010-10-22/obama-en-aus...

http://new.euro-med.dk/wp-content/uploads/Putin-datan-horns2.jpg

http://euro-med.dk/billeder/billederpopesignbig5.jpg

http://www.infiniteunknown.net/wp-content/uploads/2010/07/hillary-clinto...

http://www.jesus-is-savior.com/False%20Religions/Wicca%20&%20Witchcraft/...

Anybody with a good eye out there think these were photoshopped? Just askin'....

 

The problem has always been to convince the citizens of the World's Nation States to give up their sovereignty to an unelected and unaccountable group of Globalist bankers to be henceforth known as the NWO.

That's why they set up the false "Good NWO" vs. "Bad NWO" dialectic.

America however is going to be a much tougher nation to convince than most because the Muttonheads actually believe that thing about Freedom and Liberty, Pursuit of Happiness and Right to Bear Arms.  Obama harbors no illusions however that the Constitution means anything other than what he wants it to mean. My guess is that they will try to take as many guns out of the hands of citizens as they can (using the current batch of False Flags as justification) and then bring the nation to it's knees economically and then perhaps even miltarly.

It doesn't help in knowing that they have already recently re-outfitted both a D.C. area nuclear bombshelter and Cheyenne Mountian.

ZerOhead's picture

It all seems to be quickly coming to an engineered head. Military confrontation or the threat thereof is not far away.

The only question you need to ask yourself is "Is what the MSM is telling you real or are the Globalist behind BOTH sides?".

That in turn determines what you should be doing right now...

TeamDepends's picture

Actually, if this engineer is to be believed, and she is quite convincing, Jade is Artificial Intelligence which will control our military in the days to come. Eliminating the "tedious" human chain of command, which is slow and prone to error, Jade will decide who lives and who dies in the blink of an eye. Warning, this is very disturbing.http://projectavalon.net/forum4/showthread.php?83233-Hagmann-Hagmann-Rep...

ZerOhead's picture

TD... The future of humanity will assuredly be dark because absolute power corrupts absolutely... but I'm can't be too worried about the days to come.

This is happening NOW so either the world experiences a conscious awakening RIGHT NOW or it's NWO time.

If they win then we lose.

If they lose then rest assured they'll be back again later.

WOAR's picture

I...doubt that. On multiple levels. Not the part about a machine making better decisions, mind you, but...

That only works on a "planning" level. Wars never, ever, go as planned. Otherwise, how would one lose?

Not only that, but rank structure is required in the field, period. NCO's and Captains will always make decisions that could never be imagined at higher levels. Always.

TeamDepends's picture

Listen to the podcast. It is almost three hours long, but well worth it. Add to this the fact that Barry has gutted the top echelon of military leadership who were loyal to the Constitution and we have a real nightmare on our hands.

ZerOhead's picture

And not a moment too soon for Greece... not to say the EU isn't going to play with them like a cat with a live but half-dead mouse for a little bit longer.

 

SPOILER ALERT : It's a trap because the Chinese, Russian and Indian leadership are already owned by the Globalists.

Think about it.... None of what you are witnessing makes sense unless it's all part of the  NWO TRAP because even at the reduced pension rates of 600 euros per month the Greeks are still living better than 95% of Chinese and Indian citizens who are ostensibly the ones paying in the $100B.

And what is the chance the the Greeks will pay them back again?

Right.

Almost Solvent's picture

Admiral Ackbar Approved! (AAA)

ZerOhead's picture

Thanks!

Let's all just tell them to shove their plans for a One World Government with a One World Bank (run by the same batch of motherfuckers that just burnt our global economies down to the ground) up their respective asses and we'll all be fine.

johngaltfla's picture

The USA is freaking doomed. Toast. We are too stupid to deserve to live on as a nation. Watch the video in the link below and your head will explode.

America is DOOMED: Video shows People Choosing Chocolate Bar over 10 oz. Silver Bar!

ZerOhead's picture

Oh fuck me... we are all going to die...

dreadnaught's picture

does the Silver bar have a chewy nougat center of say, lead? If its real, the bar is worth what, $225?

silvermail's picture

The U.S. dollar is in agony, and the United States is in an economic depression the like of the 1930's. The only way for the U.S. to maintain its global military and financial power - is an urgent achievement of complete and unlimited global domination. For which Washington needs to put the three remaining epicenters of global resistance to American military-financial dictatorship on its knees: China, Europe and Russia. The weakening of just China or Europe will not bring Washington the desired result. Because in each of these options the resistance blocs Europe-Russia or China-Russia remain intact.

The goal of Washington's game in this hand is pragmatic, transparent and easily understood by anyone who is able to think independently.

Grandmaster Putin's Golden Trap. Part 3.2 The battle for Eurasia

dlmaniac's picture

Not so fast.

To all the people that believe in China's economic power, take a look at their stock market. Don't you find that it looks like just about every other stock market crash in the West? And what's causing the problem? Excessive leverages, just like Western markets.

You see the fact is China is about as clueless as the West when it comes to running a healthy market. There's no excuse. They have all the examples from the Western market meltdown on how not to do it, and yet they go ahead repeating the same mistake. If they could screw own market up that badly why do people believe somehow they could get this BRICS bank correct? They don't know how. China's ability to manage economy is simply a myth.

magnetosphere's picture

funny shit.  i guess ur too stupid to realize that in a steady state economy a stock market cannot possibly exist

TruthInSunshine's picture

Chinese sheeple are as sheeple-ishish as any sheeple in the world, if not more so.

In fact, Asians tend to be more conformist & groupthink than any other ethnicity/culture.

Nikkei 40,000 and Japan, Inc. taking over the entire world circa-1989.

26 years of stagflation and 80% loss in equity "markets" in real terms since.

China today is Japan circa-1989, x10.

Bananamerican's picture

yup. i never bought that "China will take over the world" shit either....

Bullshit is BAKED into that culture like white on rice...which isn't to say that we aren't giving them a little "push downhill", out of the International goodness of our hearts, at the moment

conscious being's picture

Bankster toady telling everyone to stay in their seats, do not rush the exits when smoke starts to drift around the room.

WOAR's picture

"Don't worry, they haven't chained the doors shut yet! Wait a minute, I'm still in here! Shi-"

*stampede*

silvermail's picture

China - a country that lives at their own expense and has a steady budget surplus.
United States - a country-parasite, which lives at the expense of labor and resources of other countries. For this reason the US has a permanent budget deficit, a permanent trade balance deficit and permanent growing debt.

All the rest - it's just blah blah blah from the inability to understand this or from the unwillingness to recognize these facts.