Is the Dollar about to take another beating it so deserves?
By Dave Gonigam
14 July 2014
Excerpt from a newsletter we receive regarding Russian / China agreement to trade in rubles and yuan. Also a construct of a dedicated undersea cable to protect the system! How interesting that protecting the US financial system was our original intent, and now it's being planned to bypass it!
The next shoe might drop this week, as author Jim Rickards tweeted this morning…
BRICS, as a reminder, is shorthand for Brazil, Russia, India, China and South Africa.
While American business TV goes wall to wall this morning with Citigroup’s $7 billion cost-of-doing-business fine for mortgage securities fraud [snooze], the summit is the big story on BizAsia, the business news hour on China’s English-language CCTV…
“The BRICS’ combined economic heft is undeniable,” Mr. Rickards writes in his latest book The Death of Money. “The members represent over 40% of global population, 20% of global economic output and 40% of total foreign exchange reserves…
“Their manifesto calls for nothing less than a rethinking or overturning of the post-Second World War arrangements made at Bretton Woods and San Francisco that led to the original forms of the IMF, World Bank and the United Nations.”
Their unity is such that last fall they announced plans for a network of undersea Internet cables linking their nations — bypassing, they hope, the snoops at the NSA. “The proprietary nature of this system,” Rickards writes, “could be easily adapted to include a BRICS interbank payments system, which would facilitate the use of any BRICS-sponsored alternatives to dollar payments.”
So what might the BRICS leaders do this week?
“Their new development bank with an initial capital of $50 billion but going up to $100 billion will be launched formally at the meeting,” writes the aforementioned Simon Hunt. “Loans will also be in local currencies, thus bypassing the U.S. dollar.
“It is quite possible that at the same time there will be more discussion about de-dollarization; this could include agreement to conduct all trade within each country in their domestic currencies.”
Watch also, says Mr. Hunt, for the attendance of leaders from other emerging-market nations. “Most of the [emerging-market] world no longer trusts the USA. They want a divorce from its domination.
“Like all empires when they start declining, they make trouble with other countries because their remaining asset is military force,” Mr. Hunt adds with portent.
“Today, wars are primarily conducted through currencies and cyberspace, an activity that all major countries conduct, including the USA.
“President Obama is under pressure from his own party with the risk that in an attempt to bolster the party’s standing, he is likely to cause mischief outside the USA.”
Gee, there’s a comforting thought. And of course, there’s nothing like a kicking some ass abroad to distract the rubes from economic trouble at home. Something to think about if the economy takes a turn for the worse as summer drags on…