TEOTWAWKI

[raspberry-blower]

Interesting article over at Information Clearing House by Peter Koenig about the BRICS creating their own breakaway currency

Imagine – it is December 31, 2013. The Presidents of the BRICS (Brazil, Russia, India, China and South Africa) plus Iran and Venezuela call an impromptu press conference – in Paris – to present a 'Sea of Change in Economics,' as they call it. The announcement was circulated throughout the international media and diplomatic offices and embassies just a day before – an indication of urgency. Despite it being the last day of the year with most people thinking of their year-end festivities, the event calls the attention of many – especially the world of finance – and of course the media. The press meeting is planned for 18:00 at the Dolce Chantilly, in Chantilly, just 40 minutes from the center of Paris.

The seven presidents, accompanied by their Ministers of Finance, are seated in a half-moon panel in front of about 500 journalists from all over the world. The Chinese President and General Secretary of the Communist Party, Mr. Xi Jinping, opens the conference without fanfare, introducing the subject as an event that may have worldwide repercussions. He elaborates, "We the BRICS and some other hydrocarbon producing countries, like Iran and Venezuela – others may join in the future – have decided as of tomorrow – January 1, 2014 – to introduce two new economic measures. First, the BRICS and Iran and Venezuela will launch a new currency, called the Bricso. The Bricso will, at least initially, be a virtual currency; similar to what the Euro was in its initial years of existence and currently the Sucre in the South American trading community of ALBA. The backbone of the Bricso is a basket of moneys of the BRICS and those of Iran and Venezuela. The individual country currencies will be weighed according to their respective economic strength - similar to the Special Drawing Rights – SDR – of the IMF. The initial basket of Seven, does not impede that later other countries, trading partners of the BRICS, may join the Bricso.”
The End of the World As We Know It

A unified currency of the BRICS would pose more of a pressing threat to the US$ than the Euro ever did - however that currency would not be without its own problems.

Anyway time to cue R.E.M.

[adam2]

Can not see this suceeding, for the same reasons that the Euro may be doomed.
Too many different nations with vastly different political and economic systems for a common currency to work.

[emordnilap]

Can not see this suceeding, for the same reasons that the Euro may be doomed.

I could see something like it it starting though, which is an entirely different box of frogs. The doom, well, yes.

[Murf]

Can not see this suceeding, for the same reasons that the Euro may be doomed.
Too many different nations with vastly different political and economic systems for a common currency to work.

If I understood it correctly from what was posted, it wouldn't be a common currency like the Euro is. It would be more an alternative store of value backed by the individual currencies of the different nations.

So you wouldn't get a coffee in Rio or a bowl of borscht in St. Petersburg by paying in Bricsos, but China (or the USA!) could buy oil from Venezuela in Bricsos.

So it would be a rival to the petrodollar for OPEC countries, rather than something you'd get down at the local Bureau de Change when you're on your holidays.

I might be wrong though, as there's a first time for everything!

[emordnilap]

So it would be a rival to the petrodollar for OPEC countries!

As I said, I can see it happening - but definitely not for that reason. How many times has a rival to the petrodollar been tried (or even just mooted) and how many innocent people have died as a result?

[Murf]

So it would be a rival to the petrodollar for OPEC countries!

As I said, I can see it happening - but definitely not for that reason. How many times has a rival to the petrodollar been tried (or even just mooted) and how many innocent people have died as a result?

Iraq or Libya doing it more or less on its own isn't the same as each of the BRICs, plus a few other countries doing it all at once though.

The US aren't going to invade four of the largest countries in the world. Especially as at least three of them (not sure about Brazil) are nuclear powers.

[raspberry-blower]

Can not see this suceeding, for the same reasons that the Euro may be doomed.
Too many different nations with vastly different political and economic systems for a common currency to work.

If I understood it correctly from what was posted, it wouldn't be a common currency like the Euro is. It would be more an alternative store of value backed by the individual currencies of the different nations.

Yes.

Ultimately the days of the US$ being the reserve currency of the world are coming to an end. It is what will replace it - whether it is the yuan, rouble or, in this hypothetical situation, a hybrid currency.

Given the composition of OPEC, I seriously doubt whether the larger Arab oil producers would entertain such an idea - although the other member nations may well do. This could be a paradox for the US - the break up of OPEC just as its currency disappears down the plug hole!

[emordnilap]

U.S. fiscal failure warrants a de-Americanized world

They could begin by improving the spelling. Anyway:

For starters, all nations need to hew to the basic principles of the international law, including respect for sovereignty, and keeping hands off domestic affairs of others.

Furthermore, the authority of the United Nations in handling global hotspot issues has to be recognized. That means no one has the right to wage any form of military action against others without a UN mandate.

Apart from that, the world's financial system also has to embrace some substantial reforms.

The developing and emerging market economies need to have more say in major international financial institutions including the World Bank and the International Monetary Fund, so that they could better reflect the transformations of the global economic and political landscape.

What may also be included as a key part of an effective reform is the introduction of a new international reserve currency that is to be created to replace the dominant U.S. dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States.

The dollar can has, for the moment, been kicked further down the road. Can they keep that up? Are they just putting off the inevitable 'reset'?

[Murf]

The dollar can has, for the moment, been kicked further down the road. Can they keep that up? Are they just putting off the inevitable 'reset'?

It's a strange one. There's definately a massive debt problem all through the US and Europe which needs an actual solution. Surely those economies can't just keep on trying to print and borrow their way out of it without an extensive faeces/fan based interaction at some point?

However, the people kicking the can down the road are the ones who have the power over the money supply and are seemingly rich and powerful enough to run roughshod over morality the law, do what they want and get away with it.

They are the ones who stand to lose it all by there being some sort of reset. So they will surely go to any lengths to stay at the top of the pyramid, where they can dictate the workings of the game.

The breaking point will be probably be decided by how long they can keep their balls in the air, if you will, but more importantly by how far the people and their politicians will allow them to go before something is done about it.