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Author Topic: BRICS dump US dollar  (Read 1686 times)
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April 17, 2011, 05:53:31 PM
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Brazil, Russia, India, China and South Africa - the BRICS group of fastest growing economies - signed an agreement to use their own currencies instead of the predominant US dollar in issuing credit or grants to each other. BRICS economies hold 40 percent of the world's currency reserves, the majority of which is still in US dollars. More ...

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April 17, 2011, 10:40:14 PM
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Nothing major going on here, nothing to see here, move along people...


Lol, You say that about everything! :-)
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April 18, 2011, 06:34:51 AM
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Looks like BRICS decided that US is too stretched with Afghan, Iraq and now Libya to also wage wars against them even for sake of maintaining the super ponzy going

They're probably right.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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April 18, 2011, 07:48:22 AM
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These governments are not dumping anything, the topic title is a bit misleading. They keep huge dollars reserves... if they dump that, then you'll see the dollar plunge. I don't think they'll do it though, not while they remain believing in mercantilism.

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April 18, 2011, 03:15:28 PM
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These governments are not dumping anything, the topic title is a bit misleading. They keep huge dollars reserves... if they dump that, then you'll see the dollar plunge. I don't think they'll do it though, not while they remain believing in mercantilism.

It's not a belief that keeps things the way they are.  It's the fear of loss.  Loss of reserve value, loss of the reserves themselves, loss of their social position (civic leaders in control) and ultimately loss of their lives in a revolution.  Every one of these guys would pile on if one major player were to start dumping their reserves, but none of them wants to be the first to take the leap.  China's reserves alone could send the US FRN into massive inflation, but in doing so the Chinese government cuts their own throat.  They know that their populations' recent well being is built upon a house of cards called "international trade" and fear a great "chinese recall election" if they are seen as even remotely connected to the fall.  Sticking it to the US isn't a powerful enough motive.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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April 18, 2011, 04:02:39 PM
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It's not a belief that keeps things the way they are.  It's the fear of loss.  Loss of reserve value, loss of the reserves themselves

Well, you have to really believe in the Fed in order to think that the dollar will not collapse. By keeping their reserves, they risk losing much more.

They know that their populations' recent well being is built upon a house of cards called "international trade" and fear a great "chinese recall election" if they are seen as even remotely connected to the fall.  Sticking it to the US isn't a powerful enough motive.

Why?
The Chinese improve has not so much to do with the US buying their stuff with dollars but much more the Chinese being able of producing these stuff in the first place. They should stop accepting subsidizing the dollar and start feeding their own internal market with their production. It's true that their internal market demand is probably not the same of that of US and therefore the capital structure would have to change, what can be a bit painful. But it would be in their own benefit. They should really stop being mercantilists and let the Chinese people enjoy more the increase in capital the country has gone through.

Not to mention the reserves they're sitting on are a bomb...

I think the Chinese government has somehow realized the problem they've put themselves in, they just won't admit or take desperate actions. But they're slowly acquiring gold for example, they've strongly shifted from US long-term bonds to short-term ones etc.

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April 18, 2011, 06:09:43 PM
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It's not a belief that keeps things the way they are.  It's the fear of loss.  Loss of reserve value, loss of the reserves themselves

Well, you have to really believe in the Fed in order to think that the dollar will not collapse. By keeping their reserves, they risk losing much more.

That will prove true, eventually.  In the meantime, 'normalcy bias' limits the logical conclusions here.

Quote
They know that their populations' recent well being is built upon a house of cards called "international trade" and fear a great "chinese recall election" if they are seen as even remotely connected to the fall.  Sticking it to the US isn't a powerful enough motive.

Why?
The Chinese improve has not so much to do with the US buying their stuff with dollars but much more the Chinese being able of producing these stuff in the first place. They should stop accepting subsidizing the dollar and start feeding their own internal market with their production. It's true that their internal market demand is probably not the same of that of US and therefore the capital structure would have to change, what can be a bit painful. But it would be in their own benefit. They should really stop being mercantilists and let the Chinese people enjoy more the increase in capital the country has gone through.
What you are discribing is "decoupling", and might yet happen, but there is little evidence that it's going to happen in the next several years.  As it is, China's industrial base is strongly tuned to the manufacture of products intended for export, and it's no small thing to retool such an industrial base to serve a completely different culture.
Quote
Not to mention the reserves they're sitting on are a bomb...

Again, normalcy bias prevails.  It's been a bomb for decades, and yet it is inarguable that the Chinese people are overall better off today than if they had simply never started working for the Western nations in this capacity.  The risk is real, but the possibility that their is still much more gain to be had is also real.  Like playing Russian Roulette and you are on the fourth pull; sure it's dangerous, but there are still two more chambers left.
Quote

I think the Chinese government has somehow realized the problem they've put themselves in, they just won't admit or take desperate actions. But they're slowly acquiring gold for example, they've strongly shifted from US long-term bonds to short-term ones etc.

Yes, there are certainly signs that the Chinese are hedging against a future wherein the US FRN is no longer a trusted reserve currency.  This does no mean that they are willing to be the first one's to take the leap.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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