Frustrated with what they viewed as being ignored by the West and not having a prominent role in institutions like the World Bank and the International Monetary Fund, Brazil, Russia, India, China and South Africa (also known as the BRICS countries) have held their second summit…[and declared war on the U.S. dollar. Let me explain.] Words: 572
So says Michael Lombardi (www.ProfitConfidential.com) in edited excerpts from his original article* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
Lombardi goes on to say, in part:
The BRICS countries represent 40% of the world’s population and 20% of the world’s gross domestic product (GDP)…[and] are growing their portion of world GDP faster than the West, which means that, even in a decade, the BRICS countries are going to represent a lot more than 20% of the world’s GDP.
The BRICS countries emerged from their meetings in New Delhi to declare that:
- trade between their countries would take place in their own currencies, doing away with the use of the reserve U.S. dollar,
- trade among the BRICS countries themselves would be increased in order to reduce the influence of exporting to countries in Europe and to the U.S. (Trade among the BRICS countries is growing at a 28% annual rate and is expected to double in just a few years from the $230 billion worth of trade being transacted today in the BRICS countries, increasing their GDP influence.)
- their finance ministers would study the possibility of creating a BRICS development bank that would offer an alternative to the U.S.-dominated World Bank and report back with a proposal at next year’s summit. The proposed development bank would allow not only member BRICS countries to apply for loans for infrastructure projects and other development initiatives, but also all developing countries in the world.
[If, and when] such a bank is created, it would need to be denominated in a reserve currency so that loans could be issued in that reserve currency to developing countries around the world…
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- There is no doubt that China wants its yuan to be that reserve currency… as China continues its quest to have the yuan become an international currency on par with the U.S. dollar and the euro.
- Considering how culturally diverse the BRICS countries are, however, they may develop a new currency, which will still require that China significantly back it with its yuan.
[What the BRICS are planning] is not a good sign for the U.S. dollar longer-term, ensuring its decline and placing its reserve currency status in jeopardy.
As well, the possibility of China having its yuan as the reserve currency of choice among the BRICS countries or having the yuan back a new currency means that it will need more gold bullion to back its currency.
China has only a fraction of the gold bullion that Europe and the U.S. currently hold, pushing China to be an active and aggressive buyer in the gold bullion market today.
*http://www.profitconfidential.com/michaels-personal-notes/brics-countries-concentrated-effort-to-abandon-u-s-dollar-in-trade/ (To access the article please copy the URL and paste it into your browser.)
Editor’s Note: The above article has been has edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
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