"Mom, what does financial meltdown mean?"
Posted on 04/18/2011 8:53:27 AM PDT by Red Badger
Commentary: Beijing won't push the renminbi too fast
China and four other leading high-growth economies have taken landmark steps toward lowering the importance of the dollar in international financial transactions — part of a seminal shift in the move towards a multicurrency reserve and trading system.
Mind you, you wouldn't get an idea of anything dramatic from reading the official Chinese press on the conclusion of a summit meeting of the so-called BRICS economies (Brazil, Russia, India, China and South Africa) in the southern resort twin of Sanya in southern China last week.
"Leaders call for peace and prosperity" was the front-page headline in the China Daily. Stirring stiff. Even more striking was the prominent story the previous day that China's President Hu Jintao and visiting Brazilian President Dilma Rousseff had agreed to quicken trade procedures for "gelatin, corn, tobacco leaf, bovine embryos and semen." At least we know there's no holding back the Chinese rhetorical flourishes on these issues.
Leave aside the whimsical acronyms. Addition of South Africa to the former BRICS format seems to have galvanized the grouping. The five countries agreed to expand use of their own currencies in trade with each other — an important step toward putting the dollar into a new downsized place. One key influence is the annual expansion of China's trade volume with other core countries by 40% in 2010 — and the buoyancy looks set to continue. The BRICS' state development banks, including the China Development Bank, agreed to use their own currencies instead of the dollar in issuing credit or grants to each other — and they will also phase out the dollar in overall settlements and lending among each other.
(Excerpt) Read more at finance.yahoo.com ...
It doesn’t matter what BRICS wants or says regarding reserve currency. The only voice that matters on this topic is OPEC.
"Mom, what does financial meltdown mean?"
frankly if I were sitting in any of these countries watching Obama, I would not want my future pegged to the US Dollar either
All of whom receive billions in US foreign aid!
Hmmm ...if country A (say the US) is giving country B (say China) ‘billions in foreign aid,’ when country B has foreign exchange reserves approaching 3 Trillion (that’s with a T), who exactly is being stupid there? If I have thousands of Dollars in my wallet, and some person offers to give me 100 Dollar bill, I will take it.
The way I read the article the BRICS are not making an attempt to eliminate the $ as a reserve currency, but to diminish the status of the currency.
For example, the article states that: “The five countries agreed to expand use of their own currencies in trade with each other — an important step toward putting the dollar into a new downsized place.”
In addition, don't be so sure the up and coming economies of the BRICS won't have a significant influence should they collectively push to dethrone the dollar.
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