BRICS countries ditch US dollar for issuing credit

[Newsjock]

Source: Economic Times (India)

Brazil, Russia, India, China and South Africa - the BRICS group of fastest growing economies - Thursday signed an agreement to use their own currencies instead of the predominant US dollar in issuing credit or grants to each other.

The agreement, the first-of-its-kind, was signed at the 3rd BRICS summit here attended by Indian Prime Minister Manmohan Singh, China's Hu Jintao, Brazil's Dilma Rousseff, Russia's Dmitry Medvedev and South Africa's Jacob Zuma.

"Our designated banks have signed a framework agreement on financial cooperation which envisages grant of credit in local currencies and cooperation in capital markets and other financial services," Manmohan Singh told reporters at a news conference with other BRICS leaders.

But the agreement is confined to credit and not trade. BRICS economies hold 40 percent of the world's currency reserves, the majority of which is still in US dollars.

Read more: http://articles.economictimes.indiatimes.com/2011-04-14/news/29417583_1_economies-food-security-local-currencies

[xchrom]

1. recommend

[daleo]

2. This seems big. n/t

[BobbyBoring]

3. Rut Roh Rorge!

One of the lesser known reasons for our war in Iraq was Saddam threatening to sell his oil based on the Euro and not the USD.

I fear our money is soon to be worth far less than the paper it's printed on. Actually, it already is. People just don't know it yet but when they do.................

[customerserviceguy]

4. True

but when that day of reckoning arrives, it's not going to be pretty for those on the bottom rungs of the economic ladder. Of course, the rich will already have unloaded their dollar-denominated securities.

[Poboy]

5. recommend

[malaise]

6. They're protecting themselves

from the inevitable. Their economies were royally fugged by the US banks in 2008

[The Northerner]

7. I wouldn't be surprised considering the US dollar's devaluation

through constant inflationism by the federal reserve.

[pampango]

8. "The five BRICs have more than a sixth of the world’s economy...expected to soon match the US share"

http://www.csmonitor.com/Commentary/the-monitors-view/2011/0414/Budget-cuts-are-the-dollar-s-savior

The nipping of the wolves has already begun. It is led by China, and supported by countries from France to Brazil. The dollar’s dominance will be a topic at this week’s meeting of the Group of 20 countries and the International Monetary Fund (IMF). But the tone for those conferences was partly set Thursday in the third summit of the so-called BRIC nations – Brazil, Russia, India, China – plus South Africa this time. They agreed to use their own currencies for trade – a practice that would diminish the dollar. Together, the five BRICs have 40 percent of the world’s population and command more than a sixth of the world’s economy, a portion expected to match the US share in a few years.

China has already begun reducing its vast holdings of US dollars. That is the most worrisome sign yet of how much both markets and countries are losing confidence in Washington’s ability to rein in its debt, despite the recent agreements between President Obama and Republicans on the remainder of this year’s budget.

Just as the US dollar began to take over from the British sterling in the 1920s as the world’s top currency, China’s yuan may be on its way to take over the dollar. But how soon? And will it be slow and organic, or quick and drastic?

China’s mercantile way of controlling its economy and manipulating the value of its currency only works against its hopes of usurping the dollar. Its authoritarianism is inherently unstable, and its values run counter to those set by the US in the global system. But if China inches toward democracy and freer markets during this century, its currency, along with others, might define a new multipolar currency system in which the US dollar becomes merely a first among equals.

[conspirator]

9. Way to go Bernanke. Keep printing more toilet paper and creating inflation nt