The game is afoot.....
Submitted by Tyler Durden on 07/15/2014 14:38 -0400
http://www.zerohedge.com/news/2014-07-14/anti-dollar-alliance-prepares-launch-brics-bank
Submitted by Tyler Durden on 07/14/2014 22:58 -0400
http://rt.com/politics/official-word/172768-putin-brics-economies-alliance/
BRICS Announce $100 Billion Reserve To Bypass Fed, Developed World Central Banks
As we suggested last night, the anti-dollar alliance among the BRICS has successfully created a so-called "mini-IMF" since the BRICS are clearly furious with the IMF as it stands currently: this is what the world's developing nations just said on this topic "We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness."
As Putin explains, this is part of "a system of measures that wouldhelp prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies." Initial capital for the BRICS Bank will be $50 Billion - paid in equal share among the 5 members (with a contingent reserve up to $100 Billion) and will see India as the first President. The BRICS Bank will be based in Shanghai and chaired by Russia. Simply put, as Sovereign Man's Simon Black warns, "when you see this happen, you’ll know it’s game over for the dollar.... I give it 2-3 years."
- BRICS MINISTERS SIGN DEVELOPMENT BANK AGREEMENT
- INITIAL SUBSCRIBED CAPITAL OF BRICS BANK IS $50 BLN: STATEMENT
A quick take on existing monetary policy.
- MONETARY POLICY MUST BE CAREFULLY CALIBRATED: BRICS STATEMENT
The punchline, however, is that using bilateral swaps, the BRICS are effectively disintermediating themselves from a Fed and other "developed world" central-bank dominated world and will provide their own funding.
We are pleased to announce the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$ 100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements.... The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures.
Incidentally, the role of the dollar in such a world is, well, nil.
For those who have forgotten who the BRICS are, aside from a droll acronym by a former Goldman banker, here is a reminder of the countries that make up 3 billion in population.
Key excerpts from the Full statement:
We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness. The IMF reform process is based on high-level commitments, which already strengthened the Fund's resources and must also lead to the modernization of its governance structure so as to better reflect the increasing weight of EMDCs in the world economy. The Fund must remain a quota-based institution. We call on the membership of the IMF to find ways to implement the 14th General Review of Quotas without further delay. We reiterate our call on the IMF to develop options to move ahead with its reform process, with a view to ensuring increased voice and representation of EMDCs, in case the 2010 reforms are not entered into force by the end of the year. We also call on the membership of the IMF to reach a final agreement on a new quota formula together with the 15th General Review of Quotas so as not to further jeopardize the postponed deadline of January 2015.BRICS, as well as other EMDCs, continue to face significant financing constraints to address infrastructure gaps and sustainable development needs. With this in mind, we are pleased to announce the signing of the Agreement establishing the New Development Bank (NDB), with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies. We appreciate the work undertaken by our Finance Ministers. Based on sound banking principles, the NDB will strengthen the cooperation among our countries and will supplement the efforts of multilateral and regional financial institutions for global development, thus contributing to our collective commitments for achieving the goal of strong, sustainable and balanced growth.The Bank shall have an initial authorized capital of US$ 100 billion. The initial subscribed capital shall be of US$ 50 billion, equally shared among founding members. The first chair of the Board of Governors shall be from Russia. The first chair of the Board of Directors shall be from Brazil. The first President of the Bank shall be from India. The headquarters of the Bank shall be located in Shanghai. The New Development Bank Africa Regional Center shall be established in South Africa concurrently with the headquarters. We direct our Finance Ministers to work out the modalities for its operationalization.We are pleased to announce the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$ 100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements. We appreciate the work undertaken by our Finance Ministers and Central Bank Governors. The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures.
Goodbye visions of an SDR-world currency. As for the USD...
http://www.zerohedge.com/news/2014-07-14/anti-dollar-alliance-prepares-launch-brics-bank
Anti-Dollar Alliance Prepares Launch Of BRICS Bank
Three months ago we discussed in detail the growing anti-dollar hegemony alliances that were building across the BRICS countries(Brazil, Russia, India, China and South Africa). Their efforts at the time, to create a structure that would serve as an alternative to the IMF and the World Bank (which are dominated by the U.S. and the EU), appear to be nearing completion. As AP reports, Brazil's President Dilma Rousseff and Russia's Vladimir Putin have discussed the creation of a development bank to promote growth across the BRICS and hope to produce an agreement on the proposed institution at this week's BRICS Summit.
Brazil's President Dilma Rousseff and Russia's Vladimir Putin have discussed the creation of a development bank to promote growth in Brazil, India, China, Russia and South Africa.Rousseff received Putin in the presidential palace in Brasilia on Monday, a day before leaders of the five emerging BRICS nations meet in the northeastern city of Fortaleza.Rousseff told reporters the bank would top the summit's agenda, adding she hoped the event would produce an agreement on the proposed institution.She said the five countries "are among the largest in the world and cannot content themselves in the middle of the 21st century with any kind of dependency."Brazil and Russia also signed bilateral accords on air defense, gas and education
The leaders who will be present (not so many big fans of the US there)...
They seem serious:
- *BRICS DEVELOPMENT BANK KEY TO FOSTER GROWTH IN GROUP: BORGES
- *BRICS BANK AT 1ST TO FINANCE EXCLUSIVELY INFRASTRUCTURE:BORGES
- *RUSSIA'S PUTIN SAYS COOPERATION WITH CHINA IS GROWING
- *PUTIN SAYS RUSSIA TO PROMOTE CURRENCY SWAP WITH CHINA: XINHUA
As we concluded previously, as RBTH reports, it seems the BRICS are not slowing down efforts to create their own IMF-alternative...
The BRICS countries (Brazil, Russia, India, China and South Africa) have made significant progress in setting up structures that would serve as an alternative to the International Monetary Fund and the World Bank, which are dominated by the U.S. and the EU. A currency reserve pool, as a replacement for the IMF, and a BRICS development bank, as a replacement for the World Bank, will begin operating as soon as in 2015, Russian Ambassador at Large Vadim Lukov has said.Brazil has already drafted a charter for the BRICS Development Bank, while Russia is drawing up intergovernmental agreements on setting the bank up, he added.In addition, the BRICS countries have already agreed on the amount of authorized capital for the new institutions: $100 billion each. "Talks are under way on the distribution of the initial capital of $50 billion between the partners and on the location for the headquarters of the bank. Each of the BRICS countries has expressed a considerable interest in having the headquarters on its territory," Lukov said.It is expected that contributions to the currency reserve pool will be as follows: China, $41 billion; Brazil, India, and Russia, $18 billion each; and South Africa, $5 billion. The amount of the contributions reflects the size of the countries' economies....The creation of the BRICS Development Bank has a political significance too, since it allows its member states to promote their interests abroad. "It is a political move that can highlight the strengthening positions of countries whose opinion is frequently ignored by their developed American and European colleagues. The stronger this union and its positions on the world arena are, the easier it will be for its members to protect their own interests," points out Natalya Samoilova, head of research at the investment company Golden Hills-Kapital AM.
Perhaps the following sums it all up perfectly...
Economists warn the IMF's legitimacy is at stake, and they say U.S. standing abroad is being eroded.
"Eroded" indeed...
* * *
If the current trend continues, soon the dollar will be abandoned by most of the significant global economies and it will be kicked out of the global trade finance.Washington's bullying will make even former American allies choose the anti-dollar alliance instead of the existing dollar-based monetary system. The point of no return for the dollar may be much closer than it is generally thought. In fact, the greenback may have already past its point of no return on its way to irrelevance.
http://rt.com/politics/official-word/172768-putin-brics-economies-alliance/
Putin: No plans for BRICS military, political alliance
The BRICS countries want to challenge the international financial system’s dependency on US policies and strengthen the rule of international law, Vladimir Putin said. He stressed, however, that there are no plans for a military or political alliance.
“In the BRICS case we see a whole set of coinciding strategic interests,” Russia’s President Vladimir Putin said in an exclusive interview with Itar-Tass.
“First of all, this is the common intention to reform the international monetary and financial system. In the present form it is unjust to the BRICS countries and to new economies in general. We should take a more active part in the IMF and the World Bank's decision-making system. The international monetary system itself depends a lot on the US dollar, or, to be precise, on the monetary and financial policy of the US authorities. The BRICS countries want to change this,”Putin said.
In the modern world, the factor of common borders does not play a defining role; global processes encourage countries to join efforts as challenges and problems become shared, he said.
“Another long-term common interest of the association’s members is strengthening the rule of international law and the UN’s leading role in the international system,” the president added. “To be honest, without Russia’s and China's principled position on Syria in the Security Council the events in that country would have followed the Libyan and Iraqi scenario.”
It is clear that all the BRICS economies need serious infrastructure modernization, Putin said.“Our initiative to establish the Development Bank is aimed at expanding cooperation in this sphere.”
“Another important initiative that is underway is creating a BRICS pool of foreign currency reserves. It will become a safety net to help us form a joint response to economic challenges.”
Putin emphasized that both the Development Bank and the foreign currency reserves pool are practical steps for the BRICS countries, intended to strengthen international financial architecture and make it more balanced and just.
“It is in our common interest to use the complementarity of national economies to the maximum. Cooperation opportunities are great indeed. This is the market with almost three billion consumers. The BRICS countries have unique natural resources and a substantial technological, financial and industrial potential.”
Another important question that BRICS nations are going to raise at the summit is the increasing cases of unilateral sanctions.
“Recently Russia has been exposed to a sanction attack from the United States and its allies. We are grateful to our BRICS partners who have criticised such practices in different forms,” Putin said.
“Together we should think about a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies, but would promote a civilised dialogue on all points at issue based on mutual respect.”
Cooperation in setting rules of responsible behavior in the global information space is another important issue, the Russian president said.
“Such rules must be based on the principles of respect for a country's sovereignty, non-interference in domestic affairs, observance of human rights and freedoms, as well as equal rights for all countries to participate in Internet management. I think our joint efforts will ensure that the BRICS countries hold a leading position in strengthening international information security.”
“We are planning to shape a joint information policy in the international arena to support BRICS’ activity and to present a more unbiased picture of the world.”
“I believe it is time to raise the BRICS' role to a new level and to make our association an unalienable part of the global management system for sustainable development.”
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