Wednesday, October 28, 2009
Blessing in Disguise?
Saturday, October 24, 2009
Annulment
Sunday, October 4, 2009
BRIC Building
In economics, BRIC (typically rendered as "the BRICs" or "the BRICcountries") is an acronym that refers to the fast-growing developing economies of Brazil, Russia, India, and China. The acronym was first coined and prominently used by Goldman Sachs in 2001.[1][2] Goldman Sachs argued that, since they are developing rapidly, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world. The four countries, combined, currently account for more than a quarter of the world's land area and more than 40% of the world's population.[3][4]
Goldman Sachs did not argue that the BRICs would organize themselves into an economic bloc, or a formal trading association, as the European Union has done.[5] However, there are strong indications that the "four BRIC countries have been seeking to form a 'political club' or 'alliance'", and thereby converting "their growing economic power into greater geopolitical clout".[6][7] On June 16, 2009, the leaders of the BRIC countries held their first summit in Yekaterinburg, and issued a declaration calling for the establishment of a multipolar world order.[8]
The numbers came from Wikipedia. I don't normally like using their stuff but in this case they have some really good sources and it's far better than a summary I would have written. Do check the articles they linked to for some more background reading to this post. I've already written an article about Russian foreign policy and about Chinese fiscal policy, but I have quiet till now about Brazil or about the BRIC as a whole. In light of the recent pick of Rio de Janeiro as the location of the 2016 Olympic Summer games I'd like to change that.
Back in July, there was a G8 summit to discuss the global financial situation, which I suppose is the only thing that the G8 does (the G8 is a group of the leaders of the 8 largest economies in the world) but I didn't want to make that such a short sentence. Brazil, China, and Russia went and said that they wanted to shift the global currency away from the US Dollar. No real alternative was given and discussion on the topic wasn't even really held. The thought of ending the United States' financial dominance, however, was out in the open. According to Forbes shortly after,
A possible BRIC replacement for the dollar has more to do with a political and economic power struggle than with getting a stronger currency as the world reserve. "[The BRICs] 'have to' if they want to be able to exert their desire to be taken more seriously and seen as real economic powerhouses on the world's economic stage," says Stephen Roseman, manager at Thesis Capital.If you actually look at that link don't give me any guff about the titles being similar, I hadn't read that article since July. China is especially wary of the dollar's current dominance in the markets. They have been trading for a lot of dollars and they are now the US' largest lender. What this means for China's economy is that if the bottom falls out of the dollar and it becomes worthless, so does the yuan. Rather than buying fewer dollars and allowing for less risk China has been buying more dollars and looking for more profit. They are in almost no position to jockey for becoming the next major currency. As TIME put it, "Don't expect to change those greenbacks for redbacks anytime soon."