Thursday, March 29, 2012

The BRICS summit

The rest of the world seems to think their economic prospects will get better if they get the USA and its economic hegemony often called "The Washington Consensus" out of their lives.  Institutional analysis suggests that home-grown banksters will be as big a bunch of crooks and screw-ups as foreign ones, but you can hardly blame the rest of the world for wanting to try something else.


BRICS Nations (Brazil, Russia, India, China and South Africa) signed Local Currency agreement at Summit. They will not trade in U.S. dollars anymore. Agreements around the world between Countries to Drop U.S. dollar for trade (including Australia)

The BRIC nations (Brazil, Russia, India, China and South Africa) signed an agreement to not trade in U.S. dollars anymore, but in their own currencies. They are even working on creating their own bank for trading between each other and to handle the currencies, besides lines of credit in the currencies. BRIC nations account for half of the world's population.

New Delhi: In an initiative to promote trade in local currencies, the BRICS nations today signed two agreements to provide line of credit to the business community and decided to examine the possibility of setting up a development bank on lines of multilateral lending agencies. The agreements were signed by officials of five countries -- Brazil, Russia, India, China and South Africa -- at the fourth BRICS

"The agreements signed today by development banks of BRICS countries will boost trade by offering credit in our local currency," Prime Minister Manmohan Singh said in a media statement after the meeting. The Master Agreement on Extending Credit Facility in Local Currency and the Multilateral Letter of Credit Confirmation Facility Agreement are being perceived as a step towards replacing the dollar as the main unit of trade between them.

As regards the initiative to set up a BRICS Development Bank on the lines of multilateral lending agency, Singh said the proposal would be examined by the finance ministers.

"A suggestion has been made to set up a BRICS development bank, we have directed our FM to examine the proposal and report back by next summit," Singh said.

The initiative to set up a BRICS Development Bank on the lines of the World Bankwould allow the member countries to pool resources for infrastructure development and could also be used to lend during the difficult global environment.

Intra-BRICS trade is about USD 230 billion and has the potential of more than doubling to USD 500 billion by 2015....

The countries are the largest developing countries in the world. The dropping of the U.S. dollar will affect us especially since the U.S. is printing dollars non-stop.

Considering that Saudi Arabia and China have entered into an agreement to build a mega oil refinery worth 8.5 Billion last week, who knows how long the dollar will remain the "Petro dollar". Iran stopped trading oil for dollars on March 20th.

India is paying Iran for oil in Gold now.

Media reports suggests that India has agreed to pay the price of crude oil it imports from Iran in gold, which makes it the first country to drop the US dollar for purchasing the Iranian oil.
India, which is highly dependent on imports to meet its crude oil consumption needs, is Iran’s second-largest oil customer after China and purchases around $12 billion worth of Iranian crude every year, about 12 percent of its consumption.

Iran is one of the world’s leading producers of both natural gas and oil; it is OPEC’s second-largest oil producer and exporter after Saudi Arabia and, in 2010, was the world’s third-largest exporter of oil after Saudi Arabia and Russia. more

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