Skip to comments.BRICS demand global monetary shake-up, greater influence
Posted on 04/14/2011 2:11:41 PM PDT by Ernest_at_the_Beach
SANYA, China (Reuters) - The BRICS group of emerging-market powers kept up the pressure on Thursday for a revamped global monetary system that relies less on the dollar and for a louder voice in international financial institutions.
The leaders of Brazil, Russia, India, China and South Africa also called for stronger regulation of commodity derivatives to dampen excessive volatility in food and energy prices, which they said posed new risks for the recovery of the world economy.
Meeting on the southern Chinese island of Hainan, they said the recent financial crisis had exposed the inadequacies of the current monetary order, which has the dollar as its linchpin.
What was needed, they said in a statement, was "a broad-based international reserve currency system providing stability and certainty" -- thinly veiled criticism of what the BRICS see as Washington's neglect of its global monetary responsibilities.
The BRICS are worried that America's large trade and budget deficits will eventually debase the dollar. They also begrudge the financial and political privileges that come with being the leading reserve currency.
"The world economy is undergoing profound and complex changes," Chinese President Hu Jintao said. "The era demands that the BRICS countries strengthen dialogue and cooperation."
In another dig at the dollar, the development banks of the five BRICS nations agreed to establish mutual credit lines denominated in their local currencies, not the U.S. currency.
The head of China Development Bank (CDB), Chen Yuan, said he was prepared to lend up to 10 billion yuan to fellow BRICS, and his Russian counterpart said he was looking to borrow the yuan equivalent of at least $500 million via CDB.
"We think this will undoubtedly broaden the opportunities for Russian companies to diversify their loans," Vladimir Dmitriev, the chairman of VEB, Russia's state development bank, told reporters.
ALL DOWN TO THE BRICS
(Excerpt) Read more at finance.yahoo.com ...
The United States might not be in very good shape financially, but I don't think this is the answer. Let them bluster.
“...called for stronger regulation of commodity derivatives to dampen excessive volatility in food and energy prices...”
Probably not a bad idea.
Yes it it. Gubment control of markets never works out well.
Cool - the USA can cut off foreign aid and contributions to the UN and IMF and various other boondoggles and let these clowns get out their wallets
I agree. Let these wankers dole out cash to the World’s leeches for a while.
I don't know anything about the food commodities markets, but all the hoopla about speculators having huge impact on oil prices is BS. Most oil is traded by contract between the producer and the refiners. Much of the rest is traded on the sport market (which is the driver of oil prices). After that, only 10-15% of the oil is traded as futures. The prices of oil futures are a reaction to the spot market prices not a driver.
If there is a problem in the oil fuitures market its that there are so many financial traders involved who are in the business to make money off of the oil and those guys squeeze the airlines and rail companies out. Its the airlines, rail companies and other buyers of "real" crude oil who should be in the futures market so they can hedge against price increases.
Yes, yes just a simple study of the vast output of stupidity from Brussels should bring them back to reality. However, when its your (brand of) stupid under the light it doesn’t seem so....stupid. Despite all this there is reality and at some point the weight of stupid becomes so heavy the system collapses under it. I believe the euro will be the first over the cliff. I think you’re right, they’ll bluster but in the end be semi-smart enough to understand the light at the end of the euro tunnel isn’t day light.
Show me the money, brics. (They don’t have enough.)
The entire world is in a race to see who gets stuck with the most unpayable debt. The USA is winning at avoidance so far, which has everybody else beginning to panic.
As for the BRICs. They can have all the conferences they want. There is nothing to stop them from dumping their US treasuries and US dollars tomorrow and exchanging them for...what? Aye, there's the rub. Uncle Sam is down in the gutter with two black eyes, but there is still no paper equivalent to the US dollar.
So, what are they going to use as a reserve currency? German Marks? They aren't made anymore. British pounds? Good when the conservatives are in power, worth much less when labor runs the show. Euros? Won't be around long. Swiss francs? Canadian dollars? Australian dollars? They are all fully convertible, traded worldwide, and fairly strong. There just aren't enough of them around to become a true reserve currency, the monetary base is too small.
Good luck with the IMF Buck, or whatever you want to call it. Brought to you by the people who produced the Euro.
Debased, abused, overextended, the US dollar will continue as the world reserve currency until a suitable replacement is found. Barring bankruptcy or invasion it isn't going to happen soon.
The volume of noise about the US Dollar no longer being the world currency just got cranked a little higher. See tag.