PETER SCHIFF

PETER SCHIFF

Tuesday, June 16, 2009

The BRIC Summit and The Reserve Currency Debate

intra BRIC Brazil, Russia, India and China trade have increased significantly in recent years because you have a huge consumer of commodities that is China and a huge producer of commodities that is Russia , in this case why bother going to the American dollar , the only problem you have in those countries is that you do not have full convertibility yet or their currencies , there should be a currency of exchange in the middle and this in the future could be the Yuan or the Euro..."What the BRIC are trying to do is effectively move away from the issue that they've got themselves, which is a vast amount of foreign exchange reserves predominately denominated in dollars. They're seeing that the trade between their own economies has increased significantly," Shanat Patel from Liberum Capital said.there is not a viable alternative to the dollar at this stage , Russia and China together hold a huge amounts of dollar reserves at around 2.4 trillion , as a block the BRIC is becoming very powerful right now
The heads of the BRIC countries called for emerging economies to have a “greater voice and representation in international financial institutions” and for a “more diversified” global monetary system. The comments were made in a joint statement released after the historic meeting today.The leaders of The BRIC agreed to push for more clout in global financial institutions at this first summit, without announcing a common policy on how to flex their $2.8 trillion reserves in US Dollar .


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