Friday, May 2, 2014

More Evidence of an alternative to the IMF being constructed

In this article from Russia Today we see the same theme we have been following here for awhile now.

Everything happening right now indicates the West (the US/UK/EU) and the East (the BRIC nations) are moving further apart rather than closer together. We have all the following going on:

- dispute over the Ukraine with the West and Russia competing to control that nation

-China and the US finding themselves at odds over more and more situations (South China Sea, sanctions against Russia, sanctions against Iran, etc.)

-IMF reforms that would give the BRIC nations more influence stalled while the BRIC nations move forward with their own competing financial institutions (BRIC bank, etc)

-China and Russia becoming more and more aligned in terms of both trade agreements and military joint training, more and more trade bypassing the US dollar

In this article from Russia Today we find this quote:

"Thus the BRICS (Brazil, Russia, India, China and South Africa), fed up with ongoing American stalling at reforming the voting system in the IMF, have been working their way towards a genuine new world order. Pivoting away from the influence of the US-centric Western financial system, it makes sense to create a counterweight to the IMF; a supranational bank for the emerging east. "

"Naturally this is likely to cause it to run up against the IMF for as long as the US and EU insist on making the established supranational financial institutions vehicles for managing decline in the eurozone and elsewhere as opposed to actually imposing policies to repair failure governments and re-establish growth."

We see more and more areas of conflict and ramped up rhetoric on each side. This is why it seems unlikely to us that all of a sudden all those nations will come together at the IMF to agree on a new monetary system and/or reserve currency. We'll continue to track it.

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