BRIC-A-Brac: China Pivot or Spinning like a Top

[GRG55]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

I disagree with that.

Many of the BRICS nations - Russia and China in particular - are historical rivals. But this means nothing if there is a greater threat.

And there is one: a superpower US economy with its equivalently supersized military.

The BRICS nations have directly felt the effects of the US domination over reserve currency - this doesn't mean they are a happy family, but it does lend some incentive to cooperate so long as the existential threat is still present.

And for those who say this is inherently unstable - there are numerous examples of similarly 'unnatural' positions: Iran and the US being a prime one. The greatest threat to Iran has always been Russia - because no one else is anywhere near large enough to be a threat. That's why the US was so cozy with Iran pre-Islamic revolution.

The BRICS bank is a different proposition, however. The IMF and World Bank have US and UK fingers on the till - the BRICS have felt this directly and so no one wants a similar 'veto' control in a BRICS bank. And if there isn't a direct benefit, what exactly is the point of creating a BRICS bank then?

What is so unique about the BRICS nations experience in this regard? Is Brazil the only South American nation that has experienced this? Is RSA the only African nation that has experienced this? Is there really a compelling case for India, which aligned itself with Russia from the end of the Raj, to join a cluster of countries invented by a Goldman Sachs analyst because of US domination over the reserve currency?

Organizations with broad regional memberships such as ASEAN+3, Mercosur/UNASUR, ALADI, CELAC would seem more logical and effective mechanisms to address the concern about USA dominance. As for the BRICS Bank it is faintly reminiscent of the reasoning behind the Asia Development Bank (dissatisfaction with the World Bank), and we all know how that ended up evolving :-)

So maybe it's time for a new kid on the block. But I am having great difficulty imagining the mafiosos in Russia or the kleptocrats in China funding any major developments in RSA or India without an equal number of strings attached.

My prediction remains that BRICS is a catchy name, and that's all it's going to be in the long run...

[Polish_Silver]

Jackson vs jefferson

"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the bank...You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out."

Andrew Jackson

Don,

Great Quote!

That must have been around the time that AJ wrote to Jefferson, and got back the famous response about inflation and deflation. How timely!

What I don't get, was what year AJ wrote to Jefferson. Didn't Jefferson die in 1826?

When was AJ president?

[Polish_Silver]

eastern block nation

I'll give 50/50 odds the nation is Poland. They borrowed a bunch in the 1970's, which led to austerity in the 1980's and massive social unrest, contributing to the downfall of the Soviet Union around 1990.

I think they eventually paid it all back though---partly by massive inflation in the nations currency. My wife's first car cost 63 million Zloty. ( a two door fiat)


They are so glad they were not allowed into the Euro!

[Polish_Silver]

China's currency plans

I disagree with that.

Many of the BRICS nations - Russia and China in particular - are historical rivals. But this means nothing if there is a greater threat.

And there is one: a superpower US economy with its equivalently supersized military.

The BRICS nations have directly felt the effects of the US domination over reserve currency - this doesn't mean they are a happy family, but it does lend some incentive to cooperate so long as the existential threat is still present.

The US had "exhorbitant privilege" and borrowed money to pay for oil and a huge military.

But, within this system, China was able to peg it's currency, export loads of stuff to the US, and greatly accelerate it's economic development. So I would say the existing system worked well for China.

It arguably worked worst for Opec, who are holding depreciating Tbonds for the oil they gave us. So I would say Arabia should be first one into this new currency system.

I mean lots of people say China has opaque accounting and capital controls. So the current USD system should suit them well. A more rigorous one would make the opaque accounting more problematic.

[Polish_Silver]

UST end game

There is far more to it than this. Maybe I can talk Alex into working with me on a straw man UST restructuring plan. I think the process will reveal the impracticality of it.

So your reasoning is that no restructuring plan can work, therefore the US will face a "full fledged bond and currency crisis" which could be resolved by the offer of gold for UST and foreign held $USD?

[Polish_Silver]

Indians in South africa

Many Indians immigrated to SA during the colonial period. During Apartheid, they were the third ethnic category, which I think was roughly "colored".

[don]

Re: China's currency plans

So I would say Arabia should be first one into this new currency system.

SA is extremely vulnerable to the current weapon de jure, state destabilization.

like Saddam and Kadafi were warned,
dollars only pal . . .

[don]

Re: China's currency plans

BRICS Bank

[astonas]

Re: China's currency plans

Great maps, don!

Would you happen to have a link to their source, or a description behind the logic employed in their construction? Some remappings make perfect sense, but a few of the arrangements are unclear to me.

[don]

Re: China's currency plans

Great maps, don!

Would you happen to have a link to their source, or a description behind the logic employed in their construction? Some remappings make perfect sense, but a few of the arrangements are unclear to me.

I believe thay came out of a US Army study, circa Axis of Evil daze.

[gugion]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

3. Time dimension

If the group gets as far as agreeing on an execution plan, many unexpected problems may arise during the plan execution phase. For example in the case of Cyprus the group floated the idea of a 10% "tax" on all deposits. It did not occur to them that this might result in bank runs, requiring the banks to be closed, causing a major slowdown in the economy, further weakening the country's credit position. The longer the execution phase goes on, the more likely the plan will go off the rails. Political backlash will increase along with pressures on committee members to shift position..

I find it incredibly hard to believe that they could not foresee a bank run and loss of confidence in the markets. I don't know if I can accept that. Isn't it possible that the ECB and Germany knew exactly what they were doing and used Cyprus as an example and a "signal" to other countries and to the markets for what could happen in the future in other Euro countries. I suppose it could be paranoia, but I mean come on: We will steal 10% of your liquid savings and didn't foresee possible bank runs?

[EJ]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

I find it incredibly hard to believe that they could not foresee a bank run and loss of confidence in the markets. I don't know if I can accept that. Isn't it possible that the ECB and Germany knew exactly what they were doing and used Cyprus as an example and a "signal" to other countries and to the markets for what could happen in the future in other Euro countries. I suppose it could be paranoia, but I mean come on: We will steal 10% of your liquid savings and didn't foresee possible bank runs?

I've described Cyprus as a euro debt crisis lab for testing treatments on live humans. Maybe they are trying to send a message, but it's just as likely that they are in their efforts to resolve the crisis behaving as idiotically as they did to get into the mess in the first place.

[jabberwocky]

Re: Indians in South africa

Many Indians immigrated to SA during the colonial period. During Apartheid, they were the third ethnic category, which I think was roughly "colored".

Racism and ethnic division pre-existed apartheid.
Ghandi was much influenced by his experience as an attorney in SA, before returning to British India, and promoting independence and Indian self-sufficiency.

[c1ue]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

What is so unique about the BRICS nations experience in this regard? Is Brazil the only South American nation that has experienced this? Is RSA the only African nation that has experienced this? Is there really a compelling case for India, which aligned itself with Russia from the end of the Raj, to join a cluster of countries invented by a Goldman Sachs analyst because of US domination over the reserve currency?

Organizations with broad regional memberships such as ASEAN+3, Mercosur/UNASUR, ALADI, CELAC would seem more logical and effective mechanisms to address the concern about USA dominance. As for the BRICS Bank it is faintly reminiscent of the reasoning behind the Asia Development Bank (dissatisfaction with the World Bank), and we all know how that ended up evolving :-)

So maybe it's time for a new kid on the block. But I am having great difficulty imagining the mafiosos in Russia or the kleptocrats in China funding any major developments in RSA or India without an equal number of strings attached.

My prediction remains that BRICS is a catchy name, and that's all it's going to be in the long run...

There is no unique experience in the BRICS, but the BRICS are large enough together to be able to make something stick. The other organizations are simply too poor and unwieldy to do anything, as the UN has clearly shown.

As for altruism, no one anywhere has said anything about BRiCS doing anything for free. The question is, are there net benefits which can be obtained by BRiCS cooperation? It seems to me there are, but YMMV.

[GRG55]

Re: BRIC-A-Brac: China Pivot or Spinning like a Top

There is no unique experience in the BRICS, but the BRICS are large enough together to be able to make something stick. The other organizations are simply too poor and unwieldy to do anything, as the UN has clearly shown.

As for altruism, no one anywhere has said anything about BRiCS doing anything for free. The question is, are there net benefits which can be obtained by BRiCS cooperation? It seems to me there are, but YMMV.

None of them are as unwieldy as BRICS...