"The dollar is our currency but your problem"
- John Connaly
It is hardly a global secret that the one thing enabling the United States to continue to fund itself through the incessant issuance of debt is the fact that the world trade is currently settled in dollars. Therefor other nations have had to buy our debt to add to their own reserves to settle trade agreements.
The Brics nations, (Brazil, India, China, Russia, South Africa) which hold close to 5 trillion dollars in US debt are now agressively trying to cut the dollar out as a settlement currency. This means they are attacking the dollar's reserve currency status.
As they do this, it becomes increasingly difficult to fund ourselves through debt issuance. We are currently buying over 70 percent of our own debt.
What happens when we are buying 100 perecent of our own debt?
Nobody knows. But were about to find out.
One thing is for sure: it won't be good for the dollar.
BRICS Nations Plan New Bank to Bypass World Bank, IMF
Russia-Iran Oil Swap Deal Gains MomentumBy James Burgess | Thu, 03 April 2014 20:13 | 0
China Backs Russia on UkraineChinese media has covered the evolving situation in Ukraine with interest, in part because China has a vested interest in Ukraine’s fate. Now, the world is returning the scrutiny. In the wake of Russian President Vladimir Putin’s decision to send troops to the Crimean Peninsula, it seems the world is taking sides on the Ukrainian issue. And everyone wants to know where China stands—one of the perils of being a major power.
China and Brazil to sign trade deal for local currency at summit of BRICS nations
China, EU sign $57bn currency swap agreement
central bank, the People’s Bank of China (PBC) on Thursday signed a
three-year currency swap agreement worth 350 billion yuan ($57 billion)
with the European Central Bank (ECB).
“The swap arrangement has been established in the context of rapidly
growing bilateral trade and investment between the euro area and China,
as well as the need to ensure the stability of financial markets,” said a statement from the ECB.
October 10, 2013, 9:18 am
Japan, India expand currency swap arrangement to $50 billion
Brazil, Europe plan undersea cable to skirt U.S. spying
At a summit in Brussels, Brazilian President Dilma Rousseff said the $185 million cable project was central to "guarantee the neutrality" of the Internet, signaling her desire to shield Brazil's Internet traffic from U.S. surveillance.
"We have to respect privacy, human rights and the sovereignty of nations. We don't want businesses to be spied upon," Rousseff told a joint news conference with the presidents of the European Commission and the European Council.