BEIJING — First it was called BRIC, a group of emerging economies thought up in 2001 by a Goldman Sachs economist, Jim O’Neill, made up of Brazil, Russia, India and China. Then it acquired an “s” for South Africa and become BRICS. Now there’s talk of Indonesia, which has a strongly growing economy, maybe wanting in: BRICSI, anyone?
As the leaders of the BRICS nations met in South Africa this week and announced they would establish a development bank to help fund five-year infrastructure investment sums, plans for a financial “safety net,” or reserve, and a string of councils to add business and intellectual heft to the group, some are wondering if Indonesia should be in.
“You can add it as a sixth BRICS, perhaps, making it BRICSI,” PK Basu, regional head of Maybank in Singapore, told the BBC.
Here’s the argument, from The Jakarta Post: Indonesia is the strongest Southeast Asian economy.
“McKinsey & Co. predicts that Indonesia will be the seventh-largest economy in the world and will add 90 million people to its middle class by 2030. There are 45 million middle-class Indonesians today, and the country ranks as the 16th largest economy in the world,” the newspaper wrote.
For now, though, it’s called BRICS, known in Chinese as “Gold Bricks” (and China is a major, perhaps the major, driving force behind it, some commentators say). The concept of BRICS has been viewed skeptically by some who are asking what these nations actually have in common. But there is a sense it may be strengthening as a group – and growing as a challenge to the established world financial order, crafted principally by the World Bank and the International Monetary Fund.
That sense of change was on view in South Africa this week when the group held its fifth summit meeting in Durban and agreed to some key things, even naming figures.
Infrastructure investment over the next five years: About $4.5 trillionwould be needed, as Xinhua, the Chinese state-run news agency, reported from Durban.
A figure for the financial reserves, called a Contingent Reserve Arrangement, would initially be $100 billion, Xinhua reported.
Also in the works are a BRICS Business Council, to provide business-to-business links within the group; a BRICS think-tanks council, to get ideas rolling; a BRICS academic forum as a way to promote specialist dialogue. (India seemed especially keen on this, with its president, Manmohan Singh, urging it at the meeting, according to Xinhua.)
How much of this is a vehicle for Chinese ambitions? China has long complained that the current world financial architecture is too American and European-focused, and said it wants a bigger voice.
Apple Daily, a Hong Kong- and Taiwan-based Chinese-language newspaper, reported that the currency reserve would be heavily financed by China – to the tune of 41 percent of its assets, or $41 billion. That has its own logic – China is after all the world’s second-largest economy.
The report quoted a Peking University economics professor, Xia Yeliang, as saying that China is putting up the money to win influence.
“China is doing it to increase its say; it’s playing the part of investor in many international organizations in the hope of being able to formulate things, even rewrite the rules of the game,” Mr. Ye was quoted as saying.
In another sign of change, China and Brazil agreed in Durban to a $30 billion currency swap, a kind of an insurance policy, to be used to finance trade in case of another global financial crisis such as the one that saw dollar liquidity dry up starting in 2008.
Meanwhile, Indonesia?
In January, its trade minister, Gita Wirjawan, noted that Indonesia did not want a status that it did not deserve, The Jakarta Post reported. But the country had reached the same economic standards as the BRICS countries, Mr. Wirjawan told a panel discussion at the annual gathering of the World Economic Forum in Davos, Switzerland, the newspaper wrote.
China, Russia, India, Japan and now Brazil have all signed trade agreements that utilize a currency other than the USD.
ReplyDeleteAs we print more and more of the worthless paper we are only fooling ourselves that things are going to work out. Other nations see the writing on the wall yet just keep printing and spending.
So now what? We will be beholding to our enemies for scraps -- or just be absorbed into the abyss that is the NWO. Regardless, the USD is dead and will not be around in 2 years. We will probably wake up to a completed exchange of 1 IMF dollar for every 7 or 10 USD.
I am willing to bet that it will be an IMF dollar and a currency form the BRIC as they lack trust and roots...
This is globalisation in action, or perhaps I should say reaction. For half a century there has been no argument as to which of the world’s currencies we should use as the “Reserve” or trusted currency. Here in the Asian region the $US is the trading currency. As a small business owner I used US dollars to pay for all my imports from Asia. The system worked well, prices were set in US dollar terms and bank accounts in Asia were geared to accept telegraphic transfers in the same currency.
ReplyDeleteJust before I retired in 2000, some Asian business houses changed and payment was required in local currencies as they considered the US currency unstable and risky. This coincided with the beginning of the period where America was so deeply in debit that China held almost ten percent of your paper. Your debit to GDP ratio was and is unsustainable and without a default and restructuring your currency there is no chance of America recovering to be a leading player in the commercial world of the future.,
Historically it is easy to trace the rise and fall of the American economy. You started WW1 as a debitor nation; by supplying both sides of the conflict while remaining neutral. America built upon the wealth you had which came from raw materials and manufacturing expertise. At the end of the war in 1918 America was a creditor nation. A short token involvement in the war led to Woodrow Wilson having a disproportionate say in the German restructuring and reparations talks.
Between the wars the American dream flourished and despite the great depression your country remained wealthy compared to the rest of the world. WW2 was less draining on the national wealth for America than for other countries who had been engaged for so much longer in the conflict. Post WW2 we saw Bretton Woods and the beginning of half a century of domination by American interests within both the commercial and military spheres of world events.
The demise of the dream and the currency in America began with the cold war when military expansionism and Star Wars technology significantly drained the national purse as nothing in the previous century, including the great depression had done. Add the above to the “American dream” which also pays little or no heed to economic prudence and the recipe for disaster is there for al to see. US foreign aid, always with a view to helping America as well as the recipient was an expensive exercise. I think it important to note that a government spending the people’s money do so with less care than if spending their own salaries!
Even with the foregoing expenditures there was hope for salvation given strong government. However with what the rest of the world sees as the bleating of spoilt brats and your people appear to regard as “entitlements” there is no hope.
The future? Well without changes to the national psyche, there is no viable future as you know it. You will have no option but to pull back from self perceived world domination. You cannot afford it and the rest of the world, particularly Asia is beginning to treat America as a bit of a joke. Your military prowess is still evident but China, India and even Indonesia are rapidly growing. Russian technology is flowing to the east as they see long term benefits for themselves by aligning the peoples of Asia, Russia and the sub continent together as a trading bloc which can also double up as a military alliance if required.
Cheers from Aussie
The demise of our dream was years of excess spending on other countries, immigration, the destruction of the family unit not to mention the USA doling out money to almost every other nation - friend and foe alike.
DeleteThe USA may very well be going to Hell but Europe will go first. Freedom will be only a memory. To Hell with world power and materialism -- I just want freedom because from there prosperity can be realized again.
Well said Kingston, as usual, you represent a conservative view that existed before Reagan destroyed it.
ReplyDeleteKingston,
ReplyDeleteI have some differences with your view. One is the improvements in the rest of the world following WWII that allowed manufacturing capacity growth. That growth competed successfully with the cost of labor (union more than non-union) in the U. S. Later, as the sad joke that was communism died, the flood gates opened further. Having large bodies of water protecting us, a very large country full of natural resources, and freedom, more or less, to invest in capitalistic endeavors helped, big time.
Star Wars? That defensive notion from the Reagan administration? I don't think that exactly was a major drain.
Just my thoughts, from what I've read and, to a lesser extent, experienced and seen.
Jean
Agree Jane... as Max and Kingston get their history from the fiction section in the leftist library of propaganda....
DeleteJean and William.
DeleteFirstly I must apologies for the misuse of the term "Star Wars". I used it in the sense that US spent billions on new innovations in the development of sophisticated military hardware. It had completely slipped my mind that the subject was still a burr under the saddle of those who consider President Reagan amongst your elites. Bearing the foregoing in mind, I think the thrust of my argument holds.
Jean Makes the excellent point concerning the improvement in manufacturing world wide and the labor costs that assisted in the demise of your own manufacturing sector. Yes I would agree and if all can understand this basic concept of economics we may be part way to understanding the present situation ailing your country and the world in general.
One of my original points was what I refer to as "the American dream". Although dressed in much fine raiment, this concept has never been anything other than greed. To dream of a house with two cars in the garage, refrigerator in the kitchen and TV set in living room and the study and two kids at college is a laudable aspiration. That the dream accepts as a given that all the items listed will be bought on credit is the down side.
We in the rest of the world, who are old enough, remember the glossy magazines showing the glitzy "Yank Tanks”, the little woman immaculately dressed as she worked in her dream kitchen and the husband arriving home with brief case and business suit.
At the time, about 1955, many of us were driving pre war cars, had ice boxes or kerosene refrigerators and the only suit was the Sunday best for church and funerals.
We had an American presence throughout the world with military bases showing off the strength of "Uncle Sam" and the propaganda associated with the ideal of freedom and the American dream as you waged your war on communism.
Of course most of the free world quite rightly joined in and gradually conditions improved. The Berlin wall finally fell, not as William seems to believe through American huffing and puffing, but through the fundamental failure of a doctrine flawed in concept and poisoned by application of the centralist theory.
I must conclude this one time return to the thread by saying once more, that apart from yours, there is no other country in which I would live if I could not reside in my own. American history is never dull. American Politics is fascinating but watching a country living in the past with a constitution suitable only for the Amish horse and buggy culture is disturbing.
To talk sense to Angie is impossible but once more I will say that if I were an American, I would be a signed up card carrying member of the Republican Party. I would however try to encourage my fellow citizens to revisit Hamilton, Adams (John) Jefferson and Madison. From these gents, a new and better concept of government can surely be found.
Cheers then from Aussie
This comment has been removed by the author.
DeleteLet be realistic, you would never be accepted here as total and complete freedom scares people like yourself. Going it alone without big government to give you the creeps - not for you.
DeleteYou do not share in the American dream of OWNING all that you have by paying your way. The freedom to take chances, succeed, and reap the benefits was never your dream. Instead you just stood there with your mouth wide open waiting to be fed. If you did come here you would fit right in with all the other foreign born trash.
You do not share in the American dream of OWNING all that you have by paying your way. The freedom to take chances, succeed, and reap the benefits was never your dream. Instead you just stood there with your mouth wide open waiting to be fed. If you did come here you would fit right in with all the other foreign born trash.
DeleteAngie,
Thank you for the response. I can afford to ignore the personal insults but your other assertions do require a response.
The dream of ownership is alive here in Aussie. A home on a quarter acre block was the driving force of almost all young couples when they married. My wife and I had just enough for the block of land and then after three or so years a deposit on a house and a twenty year mortgage. The loan was paid off and the home was free and clear of all debit after 4 years.
Now it may surprise you but since that day way back in 1966 or thereabouts we have never owed money to any man or government. We started with nothing and by following my father’s advice, we prospered to the extent we owned our own business. He said "Never spend this weeks pay check until you have the pay check for next week in your hand".
It saddens me to read your assertions; I trust they arise not from personal hatred but from ignorance. The first condition is incurable but the second can be remedied.
Cheers from Aussie
Kingston,
DeleteA couple of points I'd like to make, and in a civil way, yes? I always enjoy reading your posts, regardless of whether we agree or not.
I don't know what life in the U. S. was like in the 1950's, so I can't comment on the 'given' about procuring everything on credit. My spouse and I owe nothing, financially speaking. We worked and work hard, own our home and our cars. I'm not suggesting we're singular in that regard, indeed, I wish we weren't.
The american dream somehow being a manifestation of greed I find a bit of a stretch. Currently, that view may have validity, but from what I understand of life in the U. S. many years ago, such as in the 1950s and 1960s (sorry, that IS a long time ago), the ownership of a home and car seemed to be an aspiration; calling that greed, at least on a personal level, doesn't seem justified.
Finally, you do not seem to speak of the projection of American military power in much of a positive light. Yet you seem to grudgingly (?) concede that communism, which I consider the most oppressive form of government in modern times, was defeated, largely by American foreign policy via that projection. While U. S. foreign policy has not been sterling during our complete history, I think there's an argument to be made that, on balance, the world is better for it. Speculation? Of course. Any such thought experiment involving alternative futures is speculative, yes?
Jean
"American Politics is fascinating but watching a country living in the past with a constitution suitable only for the Amish horse and buggy culture is disturbing."
DeleteThis spoken from the mouth of someone living under a medieval queen is laughable.
And your use of the words hatred and ignorance,,well,,I suppose living one's life inside socialistic wrapping paper does entitle one to use those terms. Your pure pink petticoat is showing again.
Throw off your shackles slave!
1773-2009 Our constitution remains modern, revolutionary, and amendable. Go bow and scrape to your queen.
Jean thank you for the polite and considered reply. You make good points and I shall try to respond, also politely!
DeleteThe American dream and the post WW2 surge in both expectations and use of credit. Here we had the confluence of several factors. The Servicemen returning from the war with the expectation that all they had endured was about to be rewarded (this was a world wide expectation). An increase in the number of marriages, children conceived and the corresponding requirement for houses which outstripped supply.
There had been restrictions in the availability of consumer goods during the war and with peace came the need for manufacturers to either diversify or return to their normal pre war production. With the above factors in place there soon became a need for new ways to fund the purchases made necessary by the aspereational lifestyle of the populace.
It is all part of the fabric of your history but America pioneered so many of the lifestyle factors we take for granted today. It will come as no surprise to learn that the use of "Credit" by the individual had its origin in the US and the first credit card available was Diners Club followed by American Express in the early 50s. The plastic fantastic became a world wide phenomenon and soon the world was awash with the modern way of having it now and paying later. I do believe that within a decade or so there will be no requirement for cash as everyone will have a card.
Although the above is applicable to America, I also see the same problems everywhere else as the world follows America in most things. Australia was certainly carrying more private debit than ever before. The recent interest rate cuts have reduced this considerably
Now your other point re US military contributions. If you followed the old MW thread you would perhaps be aware that I constantly praised and referenced America as the “Worlds Policeman” for 50 years. I even think I coined the phrase, but perhaps not. I went as far as to identify your current fiscal problems five years ago and advocated that those countries which were the beneficiaries take on more of the police work as America was becoming less able to do it alone. It is interesting to note that apart from a few spot fires in Latin America involving America, we have been with you in every operation. Korea, Vietnam, Iraq and Afghanistan to mention some have all been supported by Australian forces in the ratio according to our ability.
Finally, the question of Communism. Yes I agree it has been (and still is) a pernicious doctrine which has so far failed in its implementation by those ill qualified to administer government. A fairly deep interest in China is leading me to become suspicious that they have got the concept partly right. China has arranged their affairs so that they have moderately tight central control while allowing some regions to act in a private enterprise fashion. This has produced private wealth and ideological strength. The movement towards what the average citizen regards as freedom will eventually become too strong for the central government and there will be a bloodbath or economic collapse as with the USSR; not however for some decades.
Cheers from Aussie (If you have an interest in the Monroe doctrine and the Roosevelt corollary, I would enjoy reading your views.)
Kingston,
DeleteYes, the U. S. has enjoyed a strong relationship with The Land Down Under. One of my favorite pastimes is reading, and when I was younger I read a great deal (Or, at least, what I think is a great deal) about WWII, sad and bloody a history as it was. I was, tho, fascinated by the stories of resoluteness and courage. Now that I'm a little older, I'd like to read more about the roots of the world wars (some consider it one WW, with merely a prolonged break in hostilities), some of which paint many of the participants on both sides in a less flatterring light.
Monroe and Roosevelt . . . that might require a little bit of a refresher, but I'll go for it.
Jean
Jean my thanks again
DeleteRe the Monroe Doctrine. A good starting point to understand US foreign policy in my view. I suggest you look at the history starting with the letter from Munroe to Jefferson of October 1823.This was written asking for Jefferson’s opinion concerning the proposal from the British Foreign Minister Canning. Jefferson of course, though in his ninth decade, was able to enunciate his views with a clarity not matched by any of his contemporize. You will learn that the Monroe Doctrine had its genesis in the thoughts of Jefferson.
I do hope you pursue this, do not however tell William as any mention of the British will give him apoplexy; he may perhaps remember Monroe and Jefferson but somehow I doubt his prejudice will allow him to approve of either.
Cheers Jean from Aussie
"Finally, the question of Communism. Yes I agree it has been (and still is) a pernicious doctrine which has so far failed in its implementation by those ill qualified to administer government." Kingston
DeleteWe the people do not believe in "qualified" people. We the people believe in unalienable rights.
The Declaration of Independence, meanwhile, is based upon the "self-evident" truth that "all men are ... endowed by their Creator with certain unalienable Rights".
During the Age of Enlightenment, natural law theory challenged the divine right of kings, and became an alternative justification for the establishment of a social contract, positive law, and government — and thus legal rights — in the form of classical republicanism.
The question is will the US be sucked into the NWO or due to economic failure become independent?
ReplyDeleteWe have been the worlds ATM for so long that if we can no longer afford to do we may be ignored by the rest of the world. No one is going to come to our aid even if they had the means to.
This could be a fresh start for America - if only we focus on ourselves for once. We have everything we need to rebuild and sustain ourselves. The question becomes will the people allow this crooked government to sell the soles of Americans or will we say enough...
I'm so relieved that King is back to bolster Maxie's rewriting of history. Welcome back King, I hope things are well in the land down under.
ReplyDeleteAlso, relieved to know that Star Wars led to our economic downfall. Silly me, not having thought of that on my own. Silly me, thinking RR actually caused our pending demise. All this time thinking that the fall of the Berlin wall, and the freeing of the people behind the Iron Curtain, the most slaves freed in the history of the world, actually had something to do with our promotion of freedom through strength. Silly, silly, me.
And as for the BRICS King, don't you think you Aussie's should put your money where your mouth's are and pony up? BRICAS has an even nicer ring to it. It's time to get in, the buy in is relatively cheap, probably only a few Billion for a small economy like yours considering the Chinese put up the astounding total of 41B out of their 10T economy.
And just think of the advantages of joining up with the other Social-Communist countries that have such a common bond with yours.
1773-2009 Read up King about the "Two America's". And I don't mean John Edward's motto. The Two America's relating to the growth of our "Right To Work" States. Cheers!
Australia, China Get Together Against the Dollar
ReplyDelete04/03/13
The demand for the dollar is shrinking again as Australia will now convert their money directly into Yuan instead of using the dollar as an intermediary.
Read more at http://reagancoalition.com/articles/2013/20130403004-aus-chn-dollar.html#10spriFXDptdOHll.99
At the official government level this may be in line with the Socialist policy of the current government. At a personal level it may accelerate the belief among the general public that US is sliding towards economic collapse. We are far less sophisticated here in that we still retain respect for the values of the previous generations. Thrift, honesty in financial dealings and putting money away for our old age. I wrote recently of the reliance of the world in the "Plastic Fantastic". A good financial too if used correctly but a millstone around the neck of those who fail settle the outstanding balance at the end of every month.
ReplyDeleteI have never heard of the reference from which you quote. I have heard nothing of the unsubstantiated facts contained therin but yet it makes economic sense to pursue such a course of action.
What I have believed in for years is the necessity for the ANZUS pact to remain n force and to be honored as necessary. To that end I can see little point in either country acting unilaterally.
Our Prime Minister has been loudly proclaiming the "Asian Century" and is tying her apron strings to China as tightly as possible.
What may not be apparent in America is the complete distrust we have for the present government and the Prime Minister in particular. She is reviled by over seventy percent of the voters for weak leadership, outright lying (there will never be a carbon tax under the government I lead) and this is only one example.
Opinion Polls indicate a massive landslide to the Right Wing Coalition at the general election in September. The incoming government will be less effusive in their praise for China but our reliance for economic cooperation on that country will not diminish.
As an afterthought I would mention the Australian form of political radicalization, The GREENS are the ultra Left wing political party here and as with all radical groups were more a figure for derision than a political force. This has recently changed in that they have secured the balance of power in the Senate. There does appear to e to be a corresponding group in US politics but on the other end of the spectrum. In a discussion with an Australian Senator some days ago I suggested that Jefferson would be the leader of the Tea Party movement was he alive today. To my disgust he appeared not to know who Jefferson was until I mentioned the Declaration of Independence and the Louisiana Purchase. A prophet is without honor out side his own home! (Excuse please the misquoted biblical referenced)
Cheers from Aussie