Yellow Bric Road
When the leaders of Brazil, Russia, India and China ─ known by their acronym Bric ─ held their first standalone meeting in the Russian city of Yekaterinburg on June 16, 2009 it was a wakeup call ─ and a shake down for the dollar and global financial system. On the second day of the summit, the U.S. dollar fell sharply indicating the Bric nations had found the magic power of making the dollar ride a roller coaster with only a few words.
The Bric leaders proposed investing their reserves in each other’s currencies, settling bilateral trade in domestic currencies and striking currency swap agreements. It was even suggested to include the five central Asian states of Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan and Kyrgyzstan within the framework of using the yuan as a settlement currency, which some point to as an attempt to create a miniature European Union type of arrangement in Central Asia.
The idea of replacing the dollar as a global currency with the yuan or other currency does have some significant traction. “The Bric countries can lead the world towards global monetary stability by supporting the researching and planning for the next global currency to replace the U.S. dollar,” said Morrison Bonpasse, president of the Single Global Currency Association, a U.S. think tank. Mr Bonpasse believes that “when such a single global currency supports a number of countries with 40-50 percent of the world’s GDP, the ‘tipping point’ will have been reached, and other countries will join quickly.”
The handwriting of the new global currency menu is on the Bric wall and road. Bric nations already account for 50 percent of world growth, based on purchasing parity power. While collectively their gross domestic product amounts to only 14.6 percent of the $60.7 trillion
global economy, within 20 years, it is estimated that it will reach 50 percent. Their collective populations account for 42 percent of the world’s total and 26 percent of the world’s landmass. Goldman Sachs now predicts that in 20 years, the four could together, dwarf the Group
of Seven leading industrial nations, and that China’s economy will overtake that of the U.S. in size.
The Bric leaders proposed investing their reserves in each other’s currencies, settling bilateral trade in domestic currencies and striking currency swap agreements. It was even suggested to include the five central Asian states of Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan and Kyrgyzstan within the framework of using the yuan as a settlement currency, which some point to as an attempt to create a miniature European Union type of arrangement in Central Asia.
The idea of replacing the dollar as a global currency with the yuan or other currency does have some significant traction. “The Bric countries can lead the world towards global monetary stability by supporting the researching and planning for the next global currency to replace the U.S. dollar,” said Morrison Bonpasse, president of the Single Global Currency Association, a U.S. think tank. Mr Bonpasse believes that “when such a single global currency supports a number of countries with 40-50 percent of the world’s GDP, the ‘tipping point’ will have been reached, and other countries will join quickly.”
The handwriting of the new global currency menu is on the Bric wall and road. Bric nations already account for 50 percent of world growth, based on purchasing parity power. While collectively their gross domestic product amounts to only 14.6 percent of the $60.7 trillion
global economy, within 20 years, it is estimated that it will reach 50 percent. Their collective populations account for 42 percent of the world’s total and 26 percent of the world’s landmass. Goldman Sachs now predicts that in 20 years, the four could together, dwarf the Group
of Seven leading industrial nations, and that China’s economy will overtake that of the U.S. in size.
posted by Peter de Krassel's Custom Maid Politics at 11:59 PM
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