China to export yuan to BRICS

VisuTrac · Mar 10, 2012

So China wants to deal with other nations in Yuan instead of USD?

Who woulda thunk that would be a good idea?

China to export yuan to BRICS — RT

Divesting away from the almighty greenback? Say it isn't so!

Time to start another war! Isn't this basically one of the reasons we are all hot to trot and want to spank Iran. Just because they want to trade oil for PMs like gold and silver?

Wonder when we are going to attempt to squash china?

pmbug · Mar 28, 2012

VisuTrac said: ↑

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Time to start another war! Isn't this basically one of the reasons we are all hot to trot and want to spank Iran. Just because they want to trade oil for PMs like gold and silver?
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Chicken and egg. Iran wants to trade oil for gold because the USA imposed economic sanctions (freezing them out of the international banking system / SWIFT).

On the larger issue, the USA just recently threatened the same economic sanctions against India, China et. al.:

The United State has threatened to impose sanctions against India if the South Asian country fails to reduce its purchase of crude oil from the Islamic Republic.

“If India fails to cut Iranian imports sufficiently, Obama may be compelled to bar access to the U.S. banking system for any Indian bank processing oil payments through Iran’s central bank,” Bloomberg quoted a US official as saying, on condition of anonymity, on Thursday.
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This comes as India has repeatedly insisted that it will continue to purchase crude oil from the Islamic Republic.

Indian Oil Minister Jaipal Reddy said on February 27, that New Delhi “has cordial relations with Iran and continues to import oil from them.”

In January, Iranian crude exports to India rose to 550,000 barrels a day, up 37.5 percent from December 2011.

India, the world's fourth-largest petroleum consumer, is Iran's second largest oil customer after China and purchases around USD 12 billion worth of Iranian crude every year, about 12 percent of its consumption.

Observers believe that India will press on with its plan to increase trade ties with the Islamic Republic despite fresh Western sanctions.
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PressTV - US threatens India with sanctions over Iran trade

The Obama administration wants China, India and 10 other nations to present plans detailing how they will curtail Iranian oil imports, saying past cuts aren’t enough to win them an exclusion from new U.S. sanctions.

Secretary of State Hillary Clinton this week granted Japan and European Union countries six-month, renewable exemptions from the measures that take effect June 28, crediting them with “significantly reducing” imports from the Persian Gulf nation.

While China and India, the two biggest buyers of Iran’s crude, have made cuts in recent months and years, they were not granted exemptions. The distinction is that the EU and Japan offered assurances they will go beyond past reductions and continue to curb purchases from the world’s fourth biggest producer, U.S. officials say.

“What we are looking for is for countries to come to us and tell us if they believe that they should be in that category that deserves an exemption, what are the kinds of significant reductions that they are willing to pursue,” said Carlos Pascual, the State Department’s special envoy and coordinator for international energy affairs.
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If a country doesn’t prove it’s making the necessary reductions by the end of June, any institution in that nation that settles petroleum trades through Iran’s central bank will be cut off from the U.S. banking system.
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“China has been importing Iranian crude through normal channels based on our own needs for economic development,” Hong Lei, a foreign ministry spokesman, said at a media briefing yesterday, when asked if the Asian country was considering import cuts from Iran. “China has always been against unilateral sanctions, based on domestic laws, imposed by any one country on another. We especially do not accept unilateral sanctions that are forcibly imposed on a third-party country.”

Sanctions have made it increasingly difficult to insure, ship and pay for Iranian oil. India has used a Turkish bank to route payments to Iran, dealt in currencies such as the rupee and yen, and asked Iran to secure its own ship insurance.

Efforts to arrange barter deals to pay for Iranian oil may be perceived by some in Washington as a means to skirt sanctions, one U.S. envoy said. India and Iran are considering bartering commodities and other products for crude through a rupee account with state-run UCO Bank (UCO), said two people with knowledge of the matter.

“Despite whatever the Indians say about decreasing Iranian oil imports, there are other ways they can continue to get it, through Iraq and Afghanistan, for example,” Barbara Slavin, a senior fellow on Iran at the Atlantic Council, a research institute in Washington, said in an interview. “India has such energy needs, they can’t comply with these sanctions.”
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U.S. Wants Iran Oil Buyers to Pledge Cuts or Risk Sanctions - Bloomberg

It may just be me, but I don't think economic sanctions against China and India are going to work out too well. Well, it's not just me...

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"If a country doesn’t prove it’s making the necessary reductions by the end of June, any institution in that nation that settles petroleum trades through Iran’s central bank will be cut off from the U.S. banking system."

This is terribly ill advised and poorly timed. It smells like a threat of selective lockout via the Swift system.

At a time when the US dollar is sundering as the major international settlement mechanism this is the last thing that dollar managers should consider. Whoever came up with this idea has no appreciation of two points – the weakness of the Western financial system and whatever weapon of war will be used in kind.

The major financial weakness in the US is the level of the US dollar due to sundering use in international contract settlement, the clear and present trend of substituting both the Yuan and Euro as international settlement currencies, and the lack of true economic buyers in the US long bond market.

History will record this decision at this time as a major factor in the final move to financial unwind in the West.
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“Swift” Kick To The US Dollar « Jim Sinclair's Mineset

So, what are the BRICs gonna do about it? Apparently, they are going to build their own banking clearing house:

India’s proposal to set up a bank of the BRICS nations (Brazil, Russia, India, China and South Africa) will top the agenda at the summit of the group in New Delhi Mar. 28.

India believes a joint bank would be in line with the growing economic power of the five-nation group. The bank could firm up the position of BRICS as a powerful player in global decision-making.

"The BRICS bank does not need much capital for a start," Alexander Appokin, senior expert at the Moscow- based Centre for Macroeconomic Analysis and Forecasting tells IPS. "What is more important is that the BRICS development bank presents a unique opportunity for indirect investment of central bank foreign reserves inside the countries."

A BRICS bank could for example issue convertible debt, which would arguably be top-rated and can be bought by central banks of all BRICS countries. BRICS countries would thus have a vessel for investment risk-sharing.

"China will be the biggest beneficiary of that," says Appokin. "Moreover, infrastructure investment mostly needs not just long-term financing but external monitoring for more transparency and efficiency increases. Here, a BRICS development bank could offer some advice for successful implementation of regional projects."

But, he cautions, "development structures like a BRICS bank are effective only in case they are given independence in project financing decisions from the governments, or at least room to operate in long- term development framework."

Yuhua Xiao, assistant professor at the Institute for African Studies in the Zhejiang Normal University (ZNU) in China says the idea of setting up a development bank for financing projects in these countries is a sign of the growing self-assertiveness and of independence or interdependence of emerging economies.
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BRICS Bank Could Change the Money Game - IPS ipsnews.net

Jim Sinclair summarizes the issue:

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We’ve already seen that Iran has been basically shut out of the SWIFT system and the SWIFT system is what this is all about. The SWIFT system doesn’t take any money for the money that goes through it. The SWIFT system is like the old telephone company. What it does is charge for the use of its communication.

Believe me the SWIFT system works for the West. It’s located in Belgium and you would think the US had no power on it. It’s never discussed as being a US arm, but it is a US weapon.

But we’ve already taken Iran and put a big X on it....

You’ve got to see now you’ve got this visual in front of you of a battlefield. You’ve got Wall Street firing by lighting off something that looks like a cruise missile, but it’s got SWIFT written on the side.

We tell India to cooperate or suffer the consequences. The statement was made, almost as it was at the beginning of the Iraq war, that if you’re not with us, you’re against us. If you’re not with us, you’re not in the SWIFT system. If your not with us, we’ll shut down your economy.

Now that hasn’t gone over too well with our friends, if we have any. Our friends have been saying, ‘This simply can’t be tolerated. You can’t shut down our economy.’ So we said, ‘Okay, we won’t shut down your economy, but we’ll do it selectively.’ India has said, ‘No way.’ China, ‘No way.’

What we’ve done is we’ve started barter dealing, around the world, in an enormous amount. China has been importing Iranian crude and other Asian countries are doing exactly the same thing. But in truth, over in Asia this hasn’t gone over so well.

You are starting to actually choose economic sides. You see the cruise missile coming over, with SWIFT written on the side, heading straight down into Iran. You see five or six more coming, one says China, one says India and the other three says selectively.

You are beginning to force barter transactions and degrade the system of currency exchange. You are saying to countries around the world, in today’s economic system, today’s world run by bankers and their associates, if we go to war, we’re going to war economically.

If we going to war economically, we have to have to be able to barter. There’s only one thing in the world you can barter with, that’s in a modest size. It can go by air transport and represent a huge amount of money to pay for oil, it’s called gold.
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China to export yuan to BRICS

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