BRICs May Buy Each Other’s Bonds in Shift From Dollar

[Joanne98]

Source: Bloomberg

June 16 (Bloomberg) -- Brazil, Russia, India and China are considering buying each other’s bonds and swapping currencies to lessen dependence on the U.S. dollar, Russian President Dmitry Medvedev’s top economic adviser said.

The leaders of the so-called BRIC countries will discuss measures to promote regional currencies when they meet later today, Arkady Dvorkovich told reporters in the Ural Mountains city of Yekaterinburg before the first BRIC summit.

“There will be talk about increasing the share of mutual trade in national currencies, possibly placing part of reserves in the financial instruments of partner countries,” Dvorkovich said.

Medvedev is hosting back-to-back summits of developing economies in Yekaterinburg as he seeks to lessen the world economy’s dependence on the U.S. dollar. Medvedev will hold talks later today with Chinese President Hu Jintao, Indian Prime Minister Manmohan Singh and Brazilian President Luiz Inacio Lula da Silva.

Medvedev and Hu earlier today attended a summit of the Shanghai Cooperation Organization, which also includes the four former Soviet republics of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

The Russian leader reiterated his intention to push for the creation of a “supranational currency” to challenge the U.S. dollar and encouraged China and the other Shanghai group members to use each other’s currencies for trade.


Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aWgZ7EeTvFbk

---

This is NOT because of Obama's spending. They have been planning this ever since BUSH invaded Iraq.

The illegal Iraq invasion was the last straw. There have been moves towards this for years. Regional trading blocks, bilateral agreements etc.

The dollar has always been the target.

[Joanne98]

1. Russia challenges dollar, China offers loans

YEKATERINBURG, Russia (AP) -- China and Russia sought greater international clout at a summit Tuesday, with China promising a $10 billion loan to Central Asian countries, while Russia challenged the dominance of the U.S. dollar as a global reserve currency.

Russia also gave a prominent platform to Iranian President Mahmoud Ahmadinejad amid massive protests in Iran over his bitterly disputed re-election and questions in the West about the vote.

Chinese leader Hu Jintao said China will extend a $10 billion loan to a regional group that also includes Russia and four Central Asian states.

The move adds muscle to China's role in the Shanghai Cooperation Organization, a six-nation group Russia and China use to counter the Western influence in resource-rich, strategically placed Central Asia. The other members of the organization Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

The leaders of Afghanistan, Iran, India and Pakistan were also at the table, underscoring Russia and China's reach for regional clout and global influence.

Hu said the loan is intended to shore up the struggling economies of its members amid the global financial crisis.

Meanwhile, President Dmitry Medvedev pushed his call for new global reserve currencies to complement the dollar at the summit.

"No currency system can be successful if we have financial instruments denominated in just one currency," Medvedev said. "We must strengthen the international financial system not only by making the dollar strong, but also by creating other reserve currencies."

After wrapping up the two-day Shanghai Cooperation Organization meetings, Medvedev was to host later Tuesday the first full-fledged summit of emerging economies Brazil, Russia, India and China, collectively called BRIC.

Medvedev's economic adviser Arkady Dvorkovich said Russia may put part of its currency reserves in bonds issued by Brazil, China and India. He told a briefing that Russia could make the move if the other three BRIC members reciprocate as part of efforts to diversify financial instruments.

Continued>>>
http://finance.yahoo.com/news/Russia-challenges-dollar-apf-15534139.html?sec=topStories&pos=4&asset=&ccode=

[Deja Q]

14. "No currency system can be successful if we have..."

And given existing (and partly deserved) stereotypes, the same countries making toxic or feeble products... do they deserve control of anything more serious?

[Solly Mack]

2. K&R

[Demeter]

3. Let Them

That ought to be a lesson in self-delusion. Fiat money doesn't care where it comes from, it still is the same old paper.

[MercutioATC]

5. Well, yeah....but we in the U.S. will suffer a great deal if they do.

Fiat currency is only worth what people believe it is worth. If the world stops using the U.S. dollar to hold cash reserves, we'll see a serious devaluation.

[bobshin]

10. Which is just what this country deserves while it wastes and loses

trillions of dollars propping up only the wealthy. Those of us who are poor will feel any devaluation much less. There were only two presidential candidates who ran to change the system enough to make a difference. The voters picked the media star over who would work in our best interest.

[MercutioATC]

11. You think the poor will feel it less than the wealthy?

You're dreaming.

Assume 20% devaluation.

Who has a harder time getting by, somebody who sees their $20k yearly income effectively drop to $16k or somebody who goes from $2m to $1.6m?

[Deja Q]

12. Excsue me, but Palin lost the election and post-election stories have shown repukes don't care.

With some of them hoping America fails too.

You think republicans are for America and its citizens' best interest? You're in dreamland.

:shrug:

[Deja Q]

13. Arrogance makes for some tasty blindness.

We should all be working together, but if we're all going to have to take sides... :( :eyes: :(

[dipsydoodle]

4. K & R

.

[jakeXT]

6. The last straw for Russia was probably Georgia

For China I don't know, there are so many clashes (Korea, Burma, Sudan, Pakistan...)



The Ending of America's Financial-Military Empire

By MICHAEL HUDSON

..

The attendees have assured American diplomats that it is not their aim to dismantle the financial and military empire of the United States. They simply want to discuss mutual aid – but in a way that has no role for the United States, for NATO or for the US dollar as a vehicle for trade. US diplomats may well ask what this really means, if not a move to make US hegemony obsolete. After all, that is what a multipolar world means. For starters, in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned themselves with the former CIS republics belonging to the Collective Security Treaty Organization (CSTO), established in 2002 as a counterweight to NATO.

..
http://www.counterpunch.org/hudson06152009.html



Gwadar - a port built by China - is the absolute key. It is the essential node in the crucial, ongoing, and still virtual Pipelineistan war between IPI and TAPI. IPI is the Iran-Pakistan-India pipeline, also known as the "peace pipeline", which is planned to cross from Iranian to Pakistani Balochistan - an anathema to Washington. TAPI is the perennially troubled, US-backed Turkmenistan-Afghanistan-Pakistan-India pipeline, which is planned to cross western Afghanistan via Herat and branch out to Kandahar and Gwadar.

Washington's dream scenario is Gwadar as the new Dubai - while China would need Gwadar as a port and also as a base for pumping gas via a long pipeline to China. One way or another, it will all depend on local grievances being taken very seriously. Islamabad pays a pittance in royalties for the Balochis, and development aid is negligible; Balochistan is treated as a backwater. Gwadar as the new Dubai would not necessarily mean local Balochis benefiting from the boom; in many cases they could even be stripped of their local land.

http://www.atimes.com/atimes/South_Asia/KE09Df03.html

[gtar100]

7. Another outcome of republican policies to blame on the democrats

Get ready for another round of "blame the democrats" from the idiot side of the isle.

[slipslidingaway]

8. knr nt

[pam4water]

9. We're so screwed.