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BRICS Bank, AIIB Pledge Partnership, Loans To Be Issued In Yuan
Over the first half of the year, we’ve built on several narratives that we believe are critical when it comes to understanding how the intersection of geopolitics and economics is set to shape the world going forward.
One of these narratives revolves around the extent to which three China-led ventures are set to supplant traditionally dominant supranational lenders on the way to embedding the yuan in international trade and investment.
The new ventures are the BRICS bank, the Asian Infrastructure Investment Bank, and the Silk Road Fund. We’ve discussed each of these at length and we’ve also shown that in one way or another, they all represent a shift away from the multilateral institutions that have dominated the post-war economic order.
In short, they are a response not only to the IMF’s failure to provide the world’s most important emerging economies with representation that’s commensurate with their economic clout, but also to the perceived shortcomings of the IMF and ADB. In other words, they are far more than a new foreign policy tool for Beijing to deploy on the way to cementing its status as regional hegemon.
The role of these new institutions in helping the yuan to replace the dollar as the world’s reserve currency (something which many still claim is an absurd proposition despite all evidence to the contrary) was made clear when, in April, we noted that although Beijing has sought to play down the degree to which the ventures will serve to help establish a new world economic order with China at the helm, the fact that Beijing "may encourage the $100b AIIB and $40b Silk Road Fund to issue loans directly in yuan" (via Bloomberg) and the fact that "the AIIB will establish a currency basket with China set to push for the yuan to take a prominent role" (via The South China Morning Post) suggested otherwise.
Now that the AIIB and the BRICS bank have officially launched (see here and here) and are expected to begin operations soon, it appears that not only will the yuan play a key role for both lenders, but in fact, the two development banks may effectively merge. Here’s more via The BRICS Post:
The BRICS New Development Bank will name its first investment in April next year and the first loan will be issued in yuan not dollar, top officials confirmed.
The first president of the Bank, Kundapur Vaman Kamath said in Shanghai that the new lender will work closely with the China-led Asian Infrastructure Investment Bank.
"We have partnerships that we will forge with the AIIB, the national loan banks and indeed, the existing market loan banks," he said.
The NDB with about $50 billion in capital to invest in public infrastructure will compete with institutions where the US has considerably more influence—organizations such as the World Bank and the International Monetary Fund.
The paid-in reserves are planned to be denominated in each country’s currency. The Chinese renmimbi is also expected to replace the dollar at the BRICS Bank, especially for projects in Asia.
And that is your de-dollarization du jour. While the IMF (and by extension, Washington) bickers with Berlin about just what went wrong with Greece's first two bailouts and whether or not the third iteration is feasible without massive writedowns, the world's new multilateral institutions are busy planning to make development loans in yuan. We'll close with the following quote from Nomura's Richard Koo:
It is difficult to say at this point whether the AIIB will have a negative or a positive impact on the global economy. At the very least, however, the emergence of an international institution with a viewpoint different from that of western creditors will help enhance the quality of debate over emerging economies’ debt problems.
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Remember, it was China that invented paper, paper money, printing, and money printing.
The masters shall show how it is done the right way.
Ah, the human condition is ever so easliy distracted via it's very own ego
To paraphrase Lao-tzu; "Even the largest bankruptcy begins with the smallest loan."
Forget the past, ignore the future and live in the now, after all, this time it will be different......
Central banks are evil. Whether its the Fed, The Bank of England, or any central bank coming out of the BRICS. It's time to 'un-bank'!
$
R.i.P.
They are printing more than the Fed. That is how they keep their currency low so that they can export.
Wait till they start printing money to fund research and jobs directly, it'd be a glorious day.
They'd be able to export (maybe not quite as much) any way because they can kick the shit out of us on labor costs. If we ever get behind with our technological edge we are toast-- that's why our proprietary info.
issues cause so much consternation, and is one of the drivers of the TPP.
"If we ever get behind with our technological edge"
Hahahahahahahahahaha!
$0.99 apps are a technological edge?
Lots of people believe that the iphone was an American invention. when I had a smart phone 5 years before an iphone even came out.
Samsung had tech in their cellphones back in 2003 that Americans never saw until 2008. like A2DP streaming and AVRCP control.
I remember Americans going nuts at the phone shop at Amsterdam airport buying phones not available in the USA in 2004.
Keep your mental illnesses to yourself, kiddo. There's a reason that Samsung scrapped everything they've ever done and copied Apple 1:1.
iphones are overpriced crippled devices. (no removable battery or SD card ) for a reason. You will have to figure that out for yourself.
BTW, lots of Samsung parts in iphones.
I had a touch screen smartphone in 2003. (Palm)
You are the typical Ibot.
Not very techy.
The latest incarnation of Galaxy S6 runs circles around anything apple makes.
But ibots never bother to find out.
Shift change at Butchie's?
We had texting and wide screen TV in Europe long before Americans had it. 1998.
I was texting in 1994 long before Americans even knew what it was.
I stayed in hotel in Tehran in 2003 that had wifi , even before most hotels in the USA had it.
Lockheed Martin, Raytheon, Boeing and a few others have some apps. that would blow your mind!! (literally)
China invented gunpowder.
Bingo. Although, the outcome is still mutually assured destruction...
yeah, that's what the world needs, another loan. :roll:
Man, where are all those dollar supremacy idiots with there classic bullshit line........."but why are they still converting the yuan to dollars when they describe the value of the deal, if the dollar is dead"????
Well notice idiots, there was no mention of "dollar value" in this article and won't be going forward either!
And before the idiots get rolling with, "what will back the yuan if it's not dollars"?? How about 20,000 physical tones of gold dipshits and going up by the day! I know they only reported 3500 tones last week but that's only the shit they report for foreign exchange purposes and the appearance they are still weak and vulnerable, until the moment of their choosing!
The Chinese will probably wait until the next "transition of power" moment in the US to advance their next BIG step forward!
At that moment the U.S. Stock market could drop 50% and oil will go to $20 a barrel and this dollar party will be over and the Chinese will announce their real gold holdings, which will stabilize their economy, settle the planets anxiety and retire the American dollar empire to the history books!
You are correct about the consequences for the stock market (more paper bullshit) but not physical oil. What part of all fiat will go to fucking zero don't people understand?
At the same time China is pressing ahead for full membership of the IMF including placement of its currency among the "market basket" IMF uses to certify fully convertible currencies. That should happened in a matter of weeks.
Added to these other moves, the upshot is that five or 10 years down the road, China can tell countries to ditch their dollar debts and join the glorious renmimbi world.
It is like playing one of those old hex board games and realizing it is just a matter of time until you are overwhelmed.
...and, of course, the ultimate upshot of all of this? The new NWO, with the BRICS the happy new face:
http://redefininggod.com/the-rockefeller-plan-for-the-brics-new-world-or...
Meet your new masters, same as the old masters...
Is this the same China whose Central Bank President is also an Executive Director at the Bank of International Settlements?
The same PBOC President who authored a paper for the BIS about how they want to use their vast gold and silver reserves to back the IMF's SDR?
http://www.bis.org/review/r090402c.pdf
Or is the BRICS NDB supposed to be our "New Hope," who just appointed a fuckbucket of IMF and World Bank executives to their high office?
http://redefininggod.com/2015/07/globalist-agenda-watch-2015-update-51-g...
The same BRICS NDB who recently stabbed Greece in the back, as reported by ZH? Is the AIIB the East's "World Bank" to its NDB "IMF"? Are they the same groups in general?
And why is China instituting Agenda 21 with the help of the Trilateral Commission and American EPA?
http://statelesshomesteading.com/china-21-anglo-american-sustainability-...
As Patrick Henry once said, "I smell a rat."
They say, " keep your friends close and your enemies closer."
Friends? Enemies? You think the LBMA gold and silver fix (admittedly run by the Rothschild family for over 150 years - http://www.lbma.org.uk/the-london-bullion-market) which has almost solely benefitted China and India's voracious importation, was dumb luck? The incompetence of Western central banks?
These fuckers have made their NAME rigging the metals market, and yes, despite India and China's long historical connection to physical money, both were utterly subsumed by the Anglo-American Establishment in the last 100 years: http://silverstealers.net/tss.html
So, the East has finally gotten its gold and silver back, from the very family that helped steal it a century ago... and you think this comes merely at the price of $1300-oz average purchase price? There are powers above even national and regional Central Banks, you know.
The IMF has changed the definition of currencies that are applying for membership in the SDR basket. The term "fully convertable" has been changed to "fully tradable"!
jj
BRICS + AIIB unite against __________
https://en.wikipedia.org/wiki/List_of_countries_by_external_debt
who would have thunk it!!! and please don't try to feed me that shit about debt as percentage of GDP, everyone knows GDP is cooked up by a bunch of ex-Enron accountants
I'm not so certain China wants to have the reserve currency, it comes with some drawbacks: https://en.wikipedia.org/wiki/Triffin_dilemma I figure the push to set up their own financial super structures are more
likely the result of the west dragging their feet on implementing financial reforms requested by the EM's. Also, they see Russia being blackmailed and treated like the red headed step child when it comes to the
SWIFT system. Hell, far as I'm concerned let 'em have the status. Britain, the Netherlands, Spain , Portugal, etc.. are all still kicking after losing it. It might be a blessing in disguise, we could start minding our
own damn business and let Cathay be the damn policeman for the world. As a side benefit, maybe some of the pond scum in the domestic financial districts would float on over the Pacific.
China prints more than the fed.
Good for them, they've got 1.35 billion people, I reckon they'd about have to.
Whats the matter ,kid. fishing bad?
Fabque - I think along these same lines. Can the Dragon carry the world on its back? Probably but time would tell if they can do less damage as an empire than the US.
While we in real time see a lot of injustice from a general comparative standpoint the US was probably the most benevolent empire in history. We have plenty of ALL we need and the biggest military on earth. Wouldnt hurst us to finish passing the torch and licking a lot of wounds we experienced along the way.
In any event I have said here for years the Yuan becoming reserve peg was a feature (of the central bank model) and not a bug. Pass the torch is probably better than certain world wars based on collective behavior but the imbalances of trade and finance are going to be a problem for quite a few years. Hopefully, we avoid world war. I have to admit, this last generation of Chinese are very shrewd. However, a 'thirdway' can't last, its a binary system of existance, equilibrium in this dimension isnt likely possible (at least for long). Evolution N' Chit...
Congrats.
Now if Iran is smart they will reverse the deal with Obomber and join the BRICS
Congress and Israel should be happy then, right??? right??
"...these new institutions in helping the yuan to replace the dollar as the world’s reserve currency (something which many still claim is an absurd proposition despite all evidence to the contrary)..."
Most of the commentary I've read about this has been over the speed & timing of a shift away from the USD towards the Yuan, not about it happening. Most people can already see what's happening.
There is excessive enthusiasm and exaggeration in some quarters about how fast it's happening. I think it will happen over several decades, not a coupla years. Nevertheless, it is still a major global event.
Agreed. If we can avoid a hot, shooting war, then the process should unwind gradually, involving the BIS and their SDR's in a currency basket. I think that is why you are seeing a the lot of shift in bullion--so countries
can partially back their currencies in proportion to their relative size in the world economy.
Faque - Yep. Just stated the same. Altthough even if no world war the debt haircuts are going to suck at first as it will damage investor confidence so best to continue to hedge best as possible. Its only money it aint worth dying over people.
Of course it will be in Yuan! It's only natural for it to be in Yuan, becasue that's how the Chinese workers are being paid! Becasue whatever project they decide to finance, the work will be done by CHinese labor! That's how Chinese colonized half of Africa: they bring their own workers, their own machinery, their own catering, retail and other servcices and the host country is absolutely not involved in the construction.
At least when IMF funds someting, mostly it's local constraction workers and local support (service) workforce are involved, so there is some benefit to the local people. Chinese set up their own towns and none of the benefit goes to the locals.
In 20 years Chinese will be more hated than the IMF
USA does not know how to do business.. All they bring to Africa is weapons and incite wars. China is love compared to the USA.
I have worked all over Africa so I know what I am talking about.
USA does not know how to do business.. All they bring to Africa is weapons and incite wars. China is love compared to the USA. and then they rape the country.
I have worked all over Africa so I know what I am talking about.
You know what African blacks say about American blacks? Arrogant stupid niggers.
I have never heard an African black speak like he had a mouthful of shit like American blacks.
I have never heard an African black speak like he had a mouthful of shit like American blacks.
Like the photos of the Chess GrandMasters.
Where are the USA tiddlywink players?
I'm figuring that GrandMaster would look pretty damn funny with tiddlywinks sticking out of his ass after a visit from Seal Team Six.
You asswipes are 'legends in your own mind'' its always violence and killing with you knuckledragging imbeciles.
I resemble that remark.
You mean the Seal team retards that supposedly shot OBL? then were offed to keep them quiet?
Possibly, that's how those fuckers roll---hell, they'd probably off themselves if it was for the good of the country; makes me wonder what they'd do with someone calling them retards.
They're playing with WMDs and Niger "yellow-cake."
Colin Powell to Zion's campus in NYC. Paging Colin Powell. You're needed again at Zion's NYC campus.
Liberty is a demand. Tyranny is submission..
Zion's theme song: Games without Frontiers: "Games without frontiers-war without tears..."
https://www.youtube.com/watch?v=3xZmlUV8muY
One step closer to Freegold!!
340 some odd comments about Obama a d coal? Here wd are with real news. Fuckin losers can't figure out its beyond one person. LOSERS
10mm - I guess your job of educating the masses has just begun then?
I try and tell my countrymen whats up to promote posterity. Understanding a business model helps do that. How do you get a better model if it is not openly discussed? For those with an ear man. Most dont care. In a way, I am glad it makes it easier to make money.
No educating the masses here. That indludes so called family friends. Way psst the arm waving.
Barry, Geitner, etc have forced them against the wall along with many other nations so it's no wonder they are developing their own parallel financial system -- Banking, SWIFT, and so on. Both Soros and Kissinger warned this years ago. They both said Barry was making big mistakes in the way he was dealing with both China and Russia.
China is also developing its own GPS system. I am not sure the GPS we use here even works in China:
http://news.yahoo.com/china-launches-two-satellites-builds-gps-rival-sta...
First loan, April 2016... timing seems right, we will all be desperate by then...
You can bet that the tribe is behind any global bank anywhere.
which is it-yuan or renminbi? make up yer f ing mind!
Same thing
Thumbs up to BRICS Bank & AIIB
West has looted the whole world for long
----
We dont need west anymore
overpriced useless products of west
These two banks allow China to diversify its recycling of wealth whether denominated in yuan or dollars.