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

[Down Under]

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

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.

I think a big difference is that if is idiocy, then this act of idiocy is obvious, even to J6P. Their previous acts of idiocy, that have led to the current mess, were only obvious to smart guys like yourself. That's a big, big difference.

Hence, that's why it's hard to view it as an act of idiocy.

[Southernguy]

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

No idiocy in my view: 1) reduce workers salaries and benefits. 2) privatize all; specially education, health care and public services like communications, utilities etc. To achieve that "crisis" forces guvs. to austerity and the lot.
Cyprus just one more turn to the nut.
The risk: revolution. Still not on the radars. In case it happens they can manipulate so everything goes back to "normal". See recent and sparsely reported events in Albania.
"This is class warfare and my class has won"

[GRG55]

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

The currency arrangements must be bilateral. They aren't proposing to create a new common BRICS currency, gawd forbid, so it means that they will continue the process already started to come to bilateral agreements to use paired currencies for part of their trade. China and Russia started the ball rolling in late 2010, and since then China has been the instigator of a series of bilateral currency arrangements to "internationalize" the yuan with Hong Kong, Turkey, the UAE, Brazil and Australia. It's all part of what EJ calls the long process of the "decommissioning of the US Dollar" as the sole global reserve currency. The original idea was to reduce the cost of trade as each of the pair does not have to bear the cost of converting their own currency into Dollars first in order to settle trade transactions.

However, it would seem that another emerging motivation is the potential of a disruption to the global financial system originating from the USA or the US Dollar. I am not sure what that means to Washington D.C.; perhaps EJ can shed some light on that aspect? Regardless, it's clear from the list of countries above that membership in BRICS is irrelevant to striking these deals with China, or any other important trade partner it would seem. Personally I can't see anybody in Washington being any more or less concerned about this than they were yesterday or the day before...and the media chipmunks are just making chatter out of a now routine event with a catchy acronym to sell some adverts.

But I still can't quite see the purpose of BRICS. Even with that concern, and even within BRICS it is still strictly bilateral arrangements...news this morning out of China of the signing of a bilateral currency swap with Brazil that took almost a full year to conclude [highlights mine]:

Currency deal guarantees Brazil-China trade: Brazil's CB

Xinhua | 2013-3-27 8:47:02

The currency-swap agreement of Brazil and China signed Tuesday will guarantee bilateral trade over the coming years, Brazil's Central Bank governor Alexandre Tombini said.

At a press conference in Durban after the signing, Tombini said the agreement ensures trade flows between the two even if the global economy worsens...

From Bloomberg this morning:

Gillard May Seek China Currency Deal, Australian Reports

Mar 30, 2013 1:26 AM MT

Prime Minister Julia Gillard may seek a deal enabling direct conversion of Australian dollars into Chinese currency when she visits China next week, the Australian newspaper reported today.

Gillard will attend the Boao Forum, which runs from April 6 to April 8, and visit cities including Shanghai and Beijing, the Australian newspaper reported, without saying where it got the information. Darrin Barnett, a spokesman for the prime minister, confirmed Gillard would attend the forum, declining to comment on the currency conversion deal or full itinerary.

China remained Australia’s top trading partner in January, even as transactions slid to A$9.9 billion ($10 billion), the lowest since September, according to figures from the government’s statistics bureau. Australia’s business sector has been seeking a deal for some time and a pact will help reduce costs, said Arthur Sinodinos, shadow parliamentary secretary to the leader of the opposition, according to the Australian Broadcasting Corp. website...

...Internationalization of the yuan, China’s currency, is in the interests of Australian businesses and the nation’s economy, Treasurer Wayne Swan said in July. Japan last year started to use its currency in direct trading with China.

The central banks of China and Australia signed a A$30 billion currency swap agreement to ensure the availability of capital between the trading partners, the Reserve Bank of Australia said in March 2012.

[don]

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

Prime Minister Julia Gillard, clutching a handful of freshly minted BRICS currency, declared




"the emergency bail-in has been averted!"

[GRG55]

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

Prime Minister Julia Gillard, clutching a handful of freshly minted BRICS currency, declared




"the emergency bail-in has been averted!"

All for Yuan, Yuan for all...

[astonas]

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

All for Yuan, Yuan for all...

[don]

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

All for Yuan, Yuan for all...

If only them Chinese didn't have nukes, know what I mean . . .

[GRG55]

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

I think there is something else to reinforce the importance of BRICS: to establish some currency to trade in different from the dollar.
There are big differences between BRICS, that´s true, but there is an enormous field for potential inter group commerce. Would this commerce be established not in dollars it would be a big blow to USA world dominance.
The establishment of a kind of "development bank" between them could mean a divestment for the USA-Europe centric IMF-WB system.
For now you can´t see any dramatic changes, but if political will is carried on...
Wait and see.
Just two of them, Russia and China have enormous economic, political and military power once they come to work together.
I am absolutely sure the ruling elite in Washington is quite worried.

We're in a loooong process of "decommissioning the US Dollar". These sorts of changes take a lot of time...in the case of this little step fifteen years to get to an MOU. Basically an agreement to agree, with no agreed pricing mechanism. So I doubt anybody in Washington is too concerned. Yet.

Russia, China find compromise on gas deal after 15 year standoff

MOSCOW: China has accepted an olive branch from Russia's Gazprom after years of tough talks which had failed to yield a deal on gas supplies, though the main point of conflict - price - remains.

Gazprom and China National Petroleum Corp (CNPC) agreed on Friday night that 38 billion cubic metres per year of Russian gas would flow to China starting in 2018 and come only from Russia's East Siberian fields, rather than the West Siberian fields which also supply Europe.

In signing the memorandum of understanding, Gazprom gave up its a dream of using its core fields in West Siberia to supply both Europe and China to become a "swing supplier" capable of sending the same gas east or west, depending on the most lucrative price option.

The 38 bcm is less than the planned 68 billion cubic metres per year it would have shipped under an earlier agreement which envisaged shipments from both untapped new fields in East Siberia which would be linked to China by a new pipeline, and West Siberia...



China, Russia gas deal set, but clash over price

James Byrne
25 March 2013 | 15:17 GMT

With the long-postponed China-Russia gas deal making headway during Chinese President Xi Jinping’s first foreign trip since taking office, Keun-Wook Paik, author of Sino-Russian Oil and Gas Cooperation, and former adviser to China National Petroleum Corp. (CNPC), spoke to Interfax about the developments and their implications.

Interfax: CNPC and Gazprom just signed a memorandum, which envisaged an agreement on a 38 billion cubic metre per year eastern gas pipeline signed in 2013, with the project commencing in 2018. Is this real progress?

Keun-Wook Paik: The significance of the Gazprom-CNPC deal lies in the fact both sides cleared all the remaining uncertainties on the export route and volumes, but the price issue still remains.

Gazprom’s acceptance of the eastern route first, rather than the Altai route, means Russia’s ambition to become a swing supplier between Europe and Asia was rejected by Beijing’s new leadership.

However, the [deal for] 38 bcm/y for 30 years via the eastern route will lay the foundations for making the Power of Siberia (POS) gas pipeline economically viable.

Importantly, reaching an agreement on prices before the end of 2013 is now much more likely than before. What is not clear is whether this 38 bcm/y is exclusively aimed at China’s market, or if the intention is to extend the pipeline to South Korea via the Yellow Sea.

If China still expects the upstream equity stake from the east Siberian gas development in return for reducing the price gap, then finalising the price deal before the end of 2013 will be difficult. And if China is seeking upstream equity, Russia will also seek downstream distribution market equity. Then the ultimate solution has to be the simultaneous opening of the upstream sector for China and the downstream distribution sector for Russia.

However, the best situation would be for both parties to settle the pricing disagreement based purely on the financing option...

[don]

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

this fits his longtime PM agenda - is it all delusional, wishful thinking . . .

EURASIAN TRADE ZONE
The crowning blow is the financial centerpiece to the trade zone, which draws upon the critical mass bulk of the BRICS nations as nucleus. Together Brazil, Russia, India, China, and South Africa have begun to form an alliance built upon trade and economic development, forged by investment in infrastructure and its construction. Include Iran and Indonesia to welcome the new BRIIICS nations for a larger Eastern representation. The arterial system of the trade zone will be energy supply, the life blood of commerce. The Eurasian Trade Zone is being formed, with an energy foundation. Important bilateral pacts were made concrete in the last week. Supply of crude oil, natural gas, including LNG, will come from a vast system of pipelines from Russia to Central Europe and from Russia to China. Completed pipelines will flow. Other pipelines will be completed. Crucial pacts have been made final, with more to come. Additional important pipelines along the periphery will be completed also, like the Iran-Pakistan Pipeline, despite the USGovt obstruction and intimidation. New LNG ports will be constructed. Logistics for rail traffic will be agreed upon, for commodity supply. Many features of the trade zone will be worked out, like reduced tariffs, like border inspection methods, like payment systems including barter, like environmental concerns, like regional cooperation.

BRICS DEVELOPMENT BANK
Consider the BRICS Development Bank. It is so much more than a fund to build railroads in remote African locations, as the delusional US press reports. It will form the giant credit line for countless projects upon which trade will be conducted, often called infrastructure, but so much more. It will gradually reveal itself to provide a second function, a core bank for trade payments outside the USDollar sphere. Steps are being made, extremely important steps, that will shape the next chapter. The United States will not play a role. With a trade zone and financial payment structure, the USDollar is to be rendered an outsider looking in, soon to be deemed obsolete. The many emerging nations are coming of age, flexing their muscles, banding together. Their critical mass in trade volume, in industrial output, and in product development, including patent registration, are impressive. In the last two years, they have demonstrated that the G-20 Meeting of finance ministers has totally eclipsed the G-7 Meeting that had dominated for two decades. They are making the next critical step in creating a bank, a global bank whose role will grow and expand. It will operate under the golden glow.

EXCLUSION OF UNITED STATES
The many years of abusive control of the FOREX currency markets, intervention in the sovereign bond markets, manipulation in the important commodity markets, devious propaganda in the communications networks, with support role played by the aggressive USMilitary and nefarious activity by its security agencies have guaranteed exclusion of the United States. The unspeakable abuse of the US$ credit card will end, as the global reserve currency is dismissed from its throne. The US leader crew, led by fascist bankers, can print money and counterfeit bonds all they wish, but the currency will be required to submit to grand devaluation if they wish to purchase supplies for the massively lopsided and imbalanced USEconomy, the greatest travesty in marketplace history. While the Keystone Pipeline is corrupted by the USGovt with hidden beneficiaries such as Halliburton and Burlington Northern, essentially divvying up the gangrenous paunch of the exhausted bloated American torso, the vast pipelines of the European and Asian continents are merging. They will not include the Americans, whose pathetic gambit fell on its face, the Trans-Pacific Partnership pushed by the Obama Admin. It actually attempted to form a trade zone with Asia, on condition that the lead nations Japan and South Korea excluded China. How incredibly moronic and amateurish! What a pathetic return on the dime for votes for this leader in the new police state.

BRITISH BROKER ROLE & INTRIGUE
The British have an historical knack to remain on top of the bank center heap. Earlier this year, when they announced the launch of a Chinese Yuan Swap Facility in London City, they stepped on the New York neck. Never in a million years would South Manhattan serve as the site of a Yuan Swap functionary post, not during a trade war that has a secret hot military war element being played out in Southern African near the horn (see Djibouti). The embattled British Petroleum will retain a 19.75% stake in Rosneft, which is to acquire the significant BP-TBK energy firm in Russia. Both Bank of America and Citigroup are brokering a $55 billion deal that will enable Rosneft to become the world’s largest oil company. Several hidden messages are laden within the blockbuster global changing deal by Rosneft. By dissecting the flow, it is clear the BP executive staff is selling out, since not paying dividends. The collateral for the deal toward the loans will come from USTreasury Bonds. The Anglo-American bank complex will in effect be forced to swallow its own high volume of toxic paper. The tainted BP oil giant still reels from the tarnish of the Gulf of Mexico incident. Worse, BP is finally pushed out following its dubious role in the Yeltsin years of Russia. That difficult transition period in the 1990 decade saw a failed attempt by the Western Oil Giants to control Russia and its vast energy wealth. Putin from the KGB said no, and it did not happen on his watch. He assumed the Kremlin top post. Witness a potentially crucial London role in helping the Eurasian Trade Zone, perhaps buying favor to avoid the Third World. The broad exclusion of the United States guarantees a Third World flavor and stench for the North American core, with a Mad Max overtone and a Dachau closet.

DEVIOUS CYPRUS HIDDEN ANGLE
A piece of the financing for the Rosneft deal came from GazpromBank, which operates out of Cyprus. China has posted $30 billion in USTBonds as collateral within the massive deal, in return for ample future crude oil supply. Since Russia will receive a steady flow of payments from China from diverse energy pipeline supply, in the form of USTBond fund flow, the big debt to the London banks will be paid off by USTBonds. The payoff will be in the same terms of the huge collateral. Conclude that the Eurasian Trade Zone will have an energy pipeline and delivery system with loaded supply whose foundation is built upon USTBonds, sent back to the Anglo-American bankers to digest. The USTBonds are going home to die. As Lenin said, the rope to hang themselves will be bought by the capitalists. As footnote, some important toes were stepped on in Cyprus. Expect more entries to the morgue. The event opened the door to dangerous games of brinksmanship.

The timing of the Cyprus bank account tax and confiscation is curious, exactly when the extremely significant summit meeting took place between Russian President Putin and Chinese President Xi Jinping, where several big pacts were signed. One is left to wonder if the Cyprus fire was lit by the Europeans in order to attempt to disrupt the Moscow Energy Summit with heavy smoke. It bears repeating. The summit received almost zero Western press coverage, even though its details outline a sunset of the USDollar. Maybe because its details outline a sunset of the USDollar. The Jackass is left to wonder if the next important energy pact with the Eurasian Leader Duo (Russia & China) will involve Saudi Arabia, with a whiff of sunset for the Petro-Dollar defacto standard. Cyprus might indeed have been all about trying to save the Petro-Dollar, more than the European banks. Perhaps the Moscow Summit dictated the Cyprus timetable. The Italian elections to depose Monti, Spanish high level corruption and bankruptcies, and the French backtrack on massive spending cuts, these three nations point to urgency in disaster control. The bank account tax was thrust forward, unmasking the fascist bankers.

USDOLLAR HEGEMONY ENDING
The alternative system to conducting trade outside the USDollar system has had formative stages since the Lehman Brothers and Fannie Mae collapse. The Eastern trade leaders have been very busy quietly constructing a new system, with almost zero press coverage. They prefer to work in the background. Recent events indicate they have chosen the formal public stages and forums with wider visibility, starting with the February G-20 Meeting in Moscow. The true agenda for G-20 finance ministers was to hatch finally the USDollar alternative. The sleepy West appears not to be paying much attention. The initiatives to construct alternative platforms were given a major thrust in the last year since the Iran sanctions led by the USGovt banker and their henchmen in London. For the last 20 years at least, trade has followed banking. Nations of the world have been coerced for three decades into holding USGovt debt securities in order to make payment in trade, most notably in crude oil. With the Grand Arab Recycling accord struck by the 1970 decade leaders, the Petro-Dollar was born in return for a fantastic higher oil price. The oil-rich Arab royalty supported the USDollar by recycling trade surplus into USTreasury Bonds. The conventional practice dictated that global banking systems be dominated by USTBonds in reserves, serving as the banking foundation of debt.

New chapter to turn. The ongoing endless QE to Infinity has hastened Eastern trade leaders. The near 0% return from USTBond yields has motivated them to seek alternatives. They are horrified by the debasement of their hard-earned reserves, filled to the gills with USTBonds of shrinking value and low yield. The new trade settlement system based in Gold finance will turn the tables, as once more trade is to dictate banking. The combination of central bank hyper monetary inflation, big US bank fraud, security agency $100 bill counterfeit, and rampant criminality in the US financial system has motivated the Eastern nations to act. They have acted. The clear outcome is that the Western banking system will topple, since the East will be shoving the USTBonds back to Anglo-American shores for cemetery treatment. Trade should always dictate banking. The major trade partners no longer want US$-based trade settlement. Watch for the crowning blow in the Saudi response soon, since they always follow the winners.

THE CENTERPIECE PLAN
The new BRICS development bank will surely be supplied with USTreasury Bonds at first. The primary seeding is obvious. The emerging nations have collected huge reserves from successful trade over the last decade, primarily held in USTBonds. They do not wish to hold them, since undermined and debased by their own steward at the US Federal Reserve. The big Eastern nations have committed $100 billion for the fund, whose liquidity lies in USTBonds. On a gradual ramp, the USTBonds will be converted to Gold bars for the core bank asset in the development fund. Some of the 6000 metric tons of Gold bullion removed from London banks by the Eastern entities from March to July 2012 might find their way into the BRICS Fund core. The initial role of funding critical important projects like pipelines, communication networks, railroads, shipping ports, ships & trucks, perhaps even energy transfer ports, will become clear. The more overarching role of forming a (Eastern) global core central bank clearing house for payment transactions will be its second dual role. The emerging nations have had their fill of the USDollar control mechanisms with the SWIFT bank structure, the Intl Monetary Fund steering committee, and others. Finally, Gold Trade Notes would be used in trade settlement. Witness the new Eastern Fed for trade settlement in Gold bullion. Better to call it the BRICS Development Fund, since a major Trojan Horse for excreting USTBonds through its rectum, the London Boyz busily catching it.

The Gold core will facilitate the purchase of Gold Trade Notes much like the common letters of credit used widely in commerce nowadays. Like the Eurasian Russian-Chinese energy foundation, the development fund will be built on the back of USTBonds in toxic discharge. In the process, expect extreme hardball, shoving the toxic USTBonds back into US and British banks, as collateral for huge loans, as funds for repayment of huge loans, as funds to purchase Gold. In the process, the COMEX with LBMA appendage will be drained of its Gold, a future default assured. The Western gold marts will be unmasked as corrupt dens of empty inventory shelves. What comes is a BRICS Development Fund which will serve as a quasi global gold central bank for the expressed purpose of facilitating trade settlement in Gold. This is hardly just a fund to finance African rail projects.

THE CHECKMATE
A checkmate is in progress. It has four important elements.
1) The established Eurasian Trade Zone joins the massive Asian continent with a significant portion of the European continent, where three quarters of the world population resides. The trade zone has no visible presence or participation by either the United States or United Kingdom.
2) The BRICS Development Fund will control a giant sum of $100 billion. It will eclipse the role of the Intl Monetary Fund. The fund will facilitate numerous infrastructure projects. However, its other feature will be the shocker, as its core is transformed into Gold bullion. The conversion of USTBonds to Gold will nail the coffin in the isolated USDollar, a topic of Jackass scribbles for the last full year.
3) The flow of USTBonds will be from China to London, for financing the foundation of the Eurasian Trade Zone on its energy backbone with brisk energy flow. The collateral for large loans is to be USTBonds, as is repayment for loans to be USTBonds.
4) The transition from Yuan-based trade settlement via the numerous Swap Facilities in barter trade with key nations, toward Gold trade settlement via the BRICS fund that will feature a gold core, will launch the new Gold Trade Standard. It will not be a banker dominated currency type of Gold Standard. It will instead be a trade settlement Gold Standard that bypasses the hegemony of the Anglo-American banking system, the SWIFT rules, the FOREX gaming, and the IMF/World Bank harlots that harbor insects.

ZINGERS AS COFFIN NAILS
Many are the big signals and signposts with deep meaning. They line the path to the Third World. They are many, diverse, and unmistakable in importance. The gradual discard of the USDollar as global reserve currency, the gradual discard of the USTreasury Bond as primary banking system reserve asset, these events are in progress with a speed not seen in past months or past years, not since 2008. The level of intrigue matches the level of deception. Cyprus is not a one-off event, an isolated insignificant beer fart. It is a flash point event. The tipping point events could be bank runs across Southern Europe extending to Britain and the United States, including Canada. Numerous potential tipping point events can be identified, each powerful and ominous for the US Fascists in power. The USDollar is coming home to be buried and devalued. The USTBond is coming home to be buried and downgraded. The ring fence has been clearly laid out. The checkmate with the Eurasian Trade Zone and BRICS Fund is evident for the trained analyst eye. The devaluation will cause severe price inflation and supply shortages for the USEconomy. The end game has never been more clear. Follow the numerous highly important factors at work, each of which could produce a tipping point event. The dominos are aligned and ready. Inside the US Dome of Perception, they are less visible, yet still at work for extreme consequences. Some severe disorder comes this way. Expect some quantum leaps upward in the Gold price and Silver price, each controlled by unprecedented criminal activity in the financial markets.

• The BRICS Development Fund is the main event, to build a railway to a dark place for the United States, ring fenced for its toxic USDollar. Gone will be the corrupted motivated tools like the IMF and World Bank, with even Western central banks of lesser importance. The BRICS Fund could be the Trojan Horse (much like ObamaCare) that permits a vast conduit to be built, a seemingly innocuous let permitted entrance through the door, which permits USTBonds to be dumped like the trash.
• The upcoming Gold purchases by the BRICS Fund might be coordinated with the Shanghai Metals Exchange, to exploit the artificial low London Gold price. A COMEX bust can be foreseen.
• The BRICS should be careful about the new undersea global communication cable system. In 2007, foul play resulted in the Iranian cable being cut, the result of cooperative action by the USGovt and the little ally on the Southern Med that looks northwest to Italy.
• The tipping nation is Germany, which has had its fill supporting the slower wasteful debt-ridden Southern European nations. After cutting the cord, they will embrace the Eurasian Trade Zone. Evidence is the numerous heavy rail facilities that begin in Russia and end in Germany for commodity supply. There are two Germanys, one with old corrupt ties to the West, another with traditional reliable ties to the East. The Western camp is given light by the press, while the Eastern camp works behind closed doors shaping the next chapter.
• The Eastern Alliance (often discussed in past Hat Trick Letters) is slowly coming into view. The Russian and Chinese corridor will serve as the commercial foundation. The BRICS Development Fund will serve as the backbone. When Germany joins in more overt manner, the Alliance will be clear on the geopolitical stage. Then comes the Saudis to join, complete with protectorate role already offered by the Eastern Duo giants, who together will announce the end to the Petro-Dollar defacto standard.
• The political rebellion movement inside Germany is slowly coming into view. They wish to return to the D-Mark currency and to discard the Euro, an experiment in disaster, waste, fraud, and ruin. The movement is gaining traction. Discussion of the Nordic Euro (aka Teutonic Euro) has been heard on an increasing basis among its tribal cousins. Germany will side with Russia & China, and join the next chapter, after shedding its PIIGS pen trash.
• Both Russia and China purchase all their domestic gold mining output. If truth be told, their gold reserves are multiples higher than the official data indicates. Neither nation has any desire to cooperate with such critical disclosure, much like national trade secrets. Both nations are ready for the next chapter, with a few years of preparation in new modern systems, platforms, wiring, and gold held in reserve as core wealth.
• The ABN Amro news of halted gold delivery speaks volumes to the absent inventory linked to the corrupted London gold market. They have no Gold in inventory. They control the Gold price with paper leverage and suppressive techniques. This news halt out of the Netherlands should be viewed in context of the Germans, Dutch, and Austrians demanding their gold in repatriation. London has none. What gold bullion they do obtain comes from urgent shipments from the Roman Catacombs and the Basel hills of Switzerland.
• The nations across the entire West have citizens deeply worried about their savings wealth stored in the banks. They are beginning to realize their accounts are legally considered as bank liabilities subject to heavy loss upon bank failures. They will begin to remove the money from bank accounts in droves, but with capital controls imposed.
• The Cyprus bank account tax is the latest ignored shock wave warning to the West. It is described as a small tax to assure bank solvency, but it is a vicious transfer from sovereign source to depositor private source in funded bailouts. It is confiscation. The 2005 Bankruptcy Law in the US gave away the plan, with savings deposits subordinated under derivatives. The MF-Global episode has not resulted in much learned. It was the first test ride of the subordination rules in the new law. The Jackass warned in early 2012 of an MF-Global event for bank accounts and stock accounts. The event is coming very soon, but the public is very sleepy distracted and dulled.

http://silverdoctors.com/jim-willies...ced-checkmate/

[BadJuju]

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

I feel like I've heard this schlock for years and years now. It is always the "Most important article ever." It is honestly getting tiresome at this damn point.

[GRG55]

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

this fits his longtime PM agenda - is it all delusional, wishful thinking . . .

• The BRICS Development Fund is the main event, to build a railway to a dark place for the United States, ring fenced for its toxic USDollar. Gone will be the corrupted motivated tools like the IMF and World Bank, with even Western central banks of lesser importance...

...to be replaced with other equally corrupted motivated tools.

With the exception of China these countries can't even figure out how to fix their roads (a trait that the USA is rapidly coming to share with them btw).

Officials from Iran, Indonesia, China, Russia, South Africa and India all sitting at the same table? It'll be like one of those bank heist gangster movies with all the boyz in the back room cuttin' up the cash

[astonas]

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

...to be replaced with other equally corrupted motivated tools.

There's certainly no shortage of "tools" in the world...

[EJ]

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...

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...

If members go back through my articles over the years the they will find that I never use the term BRIC. In my view this invention bears no relevance to the long-range development of the global political economy. It will be consigned it to the dustbin of convenient and misguided phrases that I also never use, including but not limited to:

Green to refer to fossil fuel energy alternatives.

The Green movement's utopian energy conceptions are an ideological frosting atop a layer cake of energy economics fallacies. The only green that matters with respect to our energy future is money. As the price of gasoline rises from $4 to $6 to $8 per gallon over the next ten years, consumers will be motivated to vote a personal interest in more affordable fuel over the fate of pristine woods, fields, streams, and furry creatures in distant lands.

Out of sight, out of mind

Somewhere in far-off Canada where they turn tar sands into oil for SUVs in the U.S.

New Normal to refer to the post credit bubble crisis.

A facile conception that treats the condition of the economy after the collapse of the stock and housing bubbles like a destination rather than what it is: a stop-over on the trip to post-cheap credit economic dysphoria.


Financial Repression to refer to latest stage of the FIRE Economy crisis.

Did policies that are collectively referred to as Financial Repression -- Zero interest rates, yield curve shaping, government ownership of Fannie and Freddie -- fall from the sky? Why did the monetary authorities and Treasury Department suddenly become so "financially repressive"? These policies were predicted here in 2006 based on the antecedent -- the collapse of a private credit bubble -- and policy and research papers published by the Fed as early as 2003, fives years before the crash. These policies were presented as remedies to prevent a deflationary depression in the wake of the inevitable collapse of the credit bubble, the growth of which the Fed was for political and ideological reasons, conflated, unable to halt or even slow. Policies referred to collectively as "Financial Repression" are a reaction, a stage in an inexorable process that began with the original sin of the credit bubble of the FIRE Economy. The real question is, What comes next?


Risk Asset used to refer to any asset other than cash and short-term Treasury bonds.

By definition a "risk asset" is any asset the future value of which cannot be determined. The formulation assumes that the most liquid assets, specifically US Treasury bills, form the foundation of the asset risk pyramid, with increasingly longer duration and illiquid assets prescribing successive risk layers up to the most illiquid and long duration assets such as private shares in a venture capital fund, forming the top. The model assumes that US Treasury bills will always be the most liquid asset. This assumption will be tested.

[ProdigyofZen]

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

I sent a link to Alex Jurshevski on this new BRICS banks idea. He greeted it with laughter. He also sent me another example of what an actual sovereign debt restructuring plan looks like, as proposed to a former Eastern Block nation, made available to me under NDA to his firm.

I'm trying to think of a way to summarize the commonalities among the proposals and execution plans, without identifying the subject of any one of them, as I think that will help members understand why sovereign debt defaults occur.

It seems that all parties to a sovereign debt crisis are strongly motivated to find a way to avoid default as that outcome is a disaster for debtor and creditor alike, and for the non-participants as well, the average citizen. Then why do defaults happen so frequently?

First let's consider a few of the more critical dimensions.

1. Formation of a decision-making committee of representatives of relevant interest groups

The initial mission of this group is to evaluate debt restructuring options and choose the one that distributes the pain of a debt restructuring the most equitably. However, the selection process itself often results in a committee that is dominated by the most politically powerful interests, which guarantees than an inequitable is adopted that fails in the execution phase. A representative selected to represent a weaker political interest group may be chosen because the individual is known to not be respected by the interest group that he or she is supposed to represent. The composition of the committee largely determines the decisions it makes. The result of a poorly structured committee might be that the most politically powerful interest groups prevail and decisions that result in the avoidance of default are made. More likely the opposite. The point being that the course to default can potentially be set by the very composition of the decision-making body that is overseeing the debt restructuring process.

2. Size of decision-making group

Assuming the committee is functional not dysfunctional by composition, there is the matter of size. A large committee representing a dozen or more interest groups is virtually guaranteed to never reach a decision. They will go over the cliff while arguing the smallest and most irrelevant details of the execution plan.

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.

4. Lack of leadership

No decision-making body can function without one member stepping out to force a decision. The majority of members will choose to defer decisions until it is too late. It is always safer to hide in the safety of group responsibility than to stand out with a strong position and force it on the others, in the process taking personal responsibility for the outcome. If there is no leadership then the group, again, will tend go over the cliff while endlessly debating but reaching no decision.

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.

EJ, just as a heads up, I know of 5 creditor committees being formed as I type for sovereign nations in the Caribbean and Central America.

There are some defaults/restructurings coming like Belize is currently undergoing (which by the way no one talks about in the MSM).

[don]

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

I've always thought of New Normal as a satirical term.