http://riafan.ru/2014/07/15/27874-briks-vmesto-g7-rossiya-delaet-pravilnyiy-vyibor/
A timely Russian report by Vladimir Vinnikov on the BRICS summit in Brazil, presenting further evidence of the undeniable relationship between FATCA and the accelerating worldwide abandonment of the US dollar. Or, as the Google-translated article so quaintly puts it, “Cinderella carriage turn into a pumpkin.”
BRICS instead of G7: Russia makes the right choice
Today, in the Brazilian city of Fortaleza in the north-east of the country “in a narrow composition” started VI BRICS summit, which then moves to the capital Brasilia. The main event of the summit, many observers recognize participation in the work of Russian President Vladimir Putin, before he has visited Cuba, Nicaragua and Argentina, and in Brazil spent the eve of the summit, a series of bilateral negotiations – including President Xi Jinping and Chancellor Angela Merkel.
These meetings confirmed that Russia’s position in the international arena, including – and Ukrainian problem – find understanding and support all over the world except the United States and a narrow circle of their closest allies, united in the G7. Therefore we can say that the attempt by the West to isolate Russia and turn it into a pariah state, accusing him of aggression against Ukraine, failed completely.
Moreover, apparently, “expulsion” of the Russian “Big Eight” and return to the U.S. format G7 go down in history of world diplomacy as a classic example of what irreversible error literally doomed recent superpower, are in the decline of its power.
Moreover, irreversibility, and not a coincidence these errors once again proved by the efforts that the United States is applied to force the banks to participate in the world system of financial control FATCA, the introduction of which is estimated to most experts, lead to a massive failure of holders of dollar-denominated assets in U.S. currency.
Even today, the demand for renminbi brought against the global financial market, reached 20-25 billion yuan every day, which is about 15 times higher than the level that was observed in mid-2013. And the creation of an alternative financial processing center in the face of the New Development Bank (New Development Bank, NDB) BRICS with registered capital of $ 50 billion, which will be the Chinese share of 40%, will undoubtedly lead to increased displacement of the dollar in international finance.
Most likely, this process would not be a one-time or even explosive character, because the conversion of dollar savings available to the Member States of the BRICS, in real assets will require considerable time – likely several years. In itself, however, this trend “out of the dollar” is undeniable, and the world, crowded dollars (real goods and services provided by not more than 5% of the outstanding dollar liabilities in the world), it may at any time take the character “chain reaction”.
Coinciding with the beginning of the Brazilian BRICS summit was “bad news” from Portugal, where the largest Banco Espirito Santo (Holy Spirit Bank) made a late payment of some bills, which led to a momentary drop in not only its actions, but also government bonds of Portugal, show how financial markets today are “overheated” and sensitive to the slightest signs of possible bankruptcy.
Once the dollar will lose its status as the only “safe haven” for global capital seekers and face competition from independent financial centers him (what, according to the BRICS, working in close cooperation with the “empire of the Rothschilds,” should become NDB Bank and its unit of account ), all the benefits of owning a printing press for the production of “bucks”, including the U.S. federal debt that can not be repaid in the amount of $ 17.6 trillion, can very quickly become a source of huge problems, “Cinderella carriage turn into a pumpkin.”
Many U.S. allies have imposed on them today burdened relations with Washington – it shows in scandal interviews with senior Polish politicians and financiers, and German Chancellor Merkel, who apparently was deeply hurt by the uninvited intrusion of “Uncle Sam” into her personal life .
We can only hope that, as Vladimir Putin assured Xi Jinping, “the plans that we have identified with you, I am absolutely sure everything will be implemented …”
Just heard on the news that this bank was opened yesterday. USG you have dug your own hole!
I never thought I be cheering for the ‘other’ team and not team USA – but I REALLY want this to take off and provide a counterbalance to the US. Absolute power corrupts absolutely. Moreover, as the Economist put it so nicely recently – the US actions against the world’s banks – basing jurisdiction solely on the use of USD looks more and more like an extortion racket.
The scary part of this is that should the United States not be able to pay its debts any more…it will “not go quietly into that good night; it will “rage, rage against the dying of the light” as in the Dylan Thomas poem.
The scariest part is one wonders what the form of that “rage” will take.
This is a sad outcome of the U.S. being so stubborn about FATCA. There was time to fix this and amend this stupidity or repeal it but, the longer this goes on the more of the above we will start to see. They cannot say no one warned them this would happen. I just shake my head at the way this has played out. Not applying FATCA to homelanders, no reciprocity, strong arming allies, bullying expats….what did they think would come of it? Honestly, they are powerful but, even the most powerful can fall. The U.S. is in trouble and has many problems. FATCA was NOT the way to address those issues at all. Wake up U.S.
I wonder how many of the blind in our Congress and Senate are reading this and other IBS comments???
@congress isn’t but, I’m sure IBS is filed under a persons of interest folder somewhere at the NSA. It’s just ludicrous all this “data gathering” while people sleep or ignore it. Assange said this bank data gathering was part of the entire “control” program.
Quite honestly, congress seems powerless and clueless to me a lot of the time. They can’t do anything but, make partisan power plays for the media and that’s about it. Dysfunctional.
http://www.zerohedge.com/news/2014-07-15/brics-announce-100-billion-reserve-bypass-fed-developed-world-central-banks
Zerohedge points out that this alliance includes only about 3 billion people.
They intend to fund it initially with 100 billion USD. USD?!?! Are they just talking figuratively here, as in the Ruble, Yuan etc. equivalent value of USD? I hope I’m the one who has overlooked something here, and not them…
These countries are so flush with excess US currency it’s like asking them each to put some of their pocket change into the coffer to seed the bank. But eventually, the bank will be able to settle international trade transactions and in any currency, thus bypassing the US dollar. It is not unlikely that gold will be one of the currencies since none of these countries have a currency that is worthy of taking the place of the dollar. If gold is the currency that becomes the preferred form of settlement, then we have seen the end of the era of fiat currencies (paper monies with no backing in precious metals, a system that started in 1971 when Nixon said that the US would no longer accept claims against its gold).
@Petros.
On the one hand they’re (rightfully) working towards ridding the world of dollar dominance, while at the same time they themselves (as creditors to the USA) have an enormous USD exposure. Lets hope they can extricate themselves from the USD without having their own economies collapse.
It will be interesting what the reaction will be in the WH, Congress and US and Cdn Media. There was a little blip on Cdn news.
I too believe, like Steve wrote, that absolute power corrupts. I also worry what a country like the USA will be desparate to do when they see they are losing their control.
http://www.zerohedge.com/news/2014-07-15/immorality-paper-money
Control of the issuance of US paper money gives the United States an immoral advantage in international trade and the ability to tax through debasement of the currency of the hard earned money of other nations. The USA has been largely benevolent until more recently: always having an advantage, but cognizant that it had to remain at least somewhat responsible if the system were to continue. But now with 1.5 trillion dollar annual deficits and continual bailouts of the banks’ bad mortgage paper, the US has become profligate and the rest of the world has to get out before the whole thing just implodes.
Has anyone checked whether this new bank complies with FATCA?
Thank God. The US and their poodles in Canada and Britain have just got so absolutely out of control in recent years … and so arrogant about it. Thank God there is going to be a credible alternative. I cant wait to convert to a FATCA free banking environment and one where massive compliance costs are NOT the order of the day. A banker said to me this week that Compliance in the broad sense (FATCA, AML, KYC and so on and so forth) is now costing his institution some 20% of his total expenditures. I add that then there are the risks that the US will at the drop of a hat claim jurisdiction over non American institutions as they choose. Is it any wonder that Bank Fees (and the value added taxes thereon) have been rocketing upwards.
Will the US flinch?
I am waiting for the day when the US is told that they now need to pay for their imports with gold or some other tangible asset deposited in Shanghai, Capetown, Delhi or Brasilia.
… and when American tourists need to buy travelers’ cheques (or prepaid debit cards issued by a Non American Institution) in a currency other than the US dollar when traveling around the world.
… and when WalMart have to settle their import bills in currency other than US$ and the shelves run short of goods due to the continual deficit.
… and when the American people wake up to the scam that has been run on their backs and in their name for the last 100 years.
…. there may be a new set renouncing theircitizenship …. and Schumer & Levin may be amongst them …..
I love the title of your post, Deckard.
As I my mind computes it,
– Canada’s Bill C-31, implementing the US FATCA IGA;
– combined with Canada’s Bill C-24 (“Cabinet will also now be permitted to allow the “disclosure of information to verify the citizenship status or identity of any person” to enforce any Canadian law “or law of another country”);
– *General David Petraus’ bold statement “after America” is “NORTH AMERICA”; and
– this announcement of the BRICS Development Bank;
all a march toward huge change for the western world as we see Canada’s strengthening attachment or merging with the USA.
A comment on Peteraus, KKR (http://www.kkr.com/leadership/david-h-petraeus) —
could be extended to: Canada (and Mexico) do not want to merge with the USA??
************
Support Canadian Sovereignty: http://www.adcs-adsc.ca/
Interesting, but all five BRICS agreed to FATCA. South Africa signed an IGA, Brazil, China and India “agreed in substance”, and Russia implemented its own law to comply with FATCA after the US suspended the IGA negotiations for political reasons.
Shadow Raider,
Did the BRICS agree to FATCA for time, having the threat lessened for their own countries’ banks?
@Shadow Raider
I believe these BRICS countries are simply buying enough time by signing FATCA deals to slowly, steadily transition away from the US dollar. Nothing too abrupt, at least for now. At some point FATCA will become nearly irrelevant, moving to the margins of their day-to-day transactions. By then, the threat of withholding sanctions by the US will look less like a big stick and more like a flimsy twig.
Here’s another excellent BRICS analysis from our trusty friend Sovereign Man (Simon Black):
@Deckard1138
Will be interesting to see how the US reacts.
I guess the journalism community is overcompensating for having misspelled the country Colombia’s name for so long – it’s British “Columbia” 😉
Bank of America profits fall 43% on legal charges
http://www.marketwatch.com/story/bank-of-america-profit-falls-43-on-legal-charges-2014-07-16
I love the title of this thread too and along the same lines here’s another article to consider:
http://www.veteranstoday.com/2014/07/15/us-dollar-suffers-serious-setback/