More BRICS News!!!!

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Yep!  The economic juggernaut threatening the US Dollar!

South Africa narrowly avoids entering a recession

JOHANNESBURG (AP) — A government data agency says South Africa narrowly avoided recession after the economy grew by less than 1 percent.

On Tuesday, Statistics South Africa released a statement saying South Africa’s economy grew by 0.7 percent, improving from a 1.3 percent contraction in the previous quarter. The government agency said South Africa would have been in recession had the economy shrunk for a second consecutive quarter.

Statistics South Africa attributed the recovery to growth in seven out of ten of South Africa’s main industries, such as manufacturing and the financial sector.

The agency, though, said some of the country’s key industries are in recession. Agriculture, affected by drought, shrank by 12.6 percent. Mining activity fell by 9.8 percent while the electricity, gas and water supply sector decreased by 8 percent.

Some may see this as a poke in the eye/victory dance over the BRICS futility and impotence.  And, in a way, it is.  I’ve called this from the start and continue to call it what it is, a fantasy. 

Each nation, individually, have their own challenges which they will not overcome anytime in the near future.  Socialism and totalitarianism (similar but not the same) will not supplant free enterprise. 

Of the BRICS nations, only India is firmly moving in the right direction.  But, their direction puts them in direct competition, not with the US, but, with China.  China is slowly moving in the right direction, but, only in fits and starts.  Unless something drastically changes, before they get to where they need to be, something very drastic will happen.  The state will not willingly relinquish control in favor of free enterprise.  Unless power is forcefully wrested from the state, the state will quash free enterprise ….. always.  Russia suffers from the Stockholm syndrome.  So long have they been held captive, they don’t know any other way.  They love their tyrants and control freaks because they don’t know, and are afraid of, the exhilarating notion of freedom!  Brazil?  What can one say about her?  Let history judge and prognosticate.  She’s Latin.  There’s nothing more you need to know.  BTW, Portugal has moved, in a most decided manner, to the left.  Expect riots for one reason or another. 

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15 Responses to More BRICS News!!!!

  1. cdquarles says:

    Indeed.

    Pop quiz.

    When did the United States become the world’s largest economy?

  2. Lars P. says:

    Yep! The economic juggernaut threatening the US Dollar!
    Not sure why do you say the BRICS would be threatening the US Dollar? Would rather think it is the US deficit that may threaten it in a way or another?

    If you look at Brazil’s main export partners:
    – China 17%
    – US 11 %
    – Argentina 7.4 %
    Import:
    – China 15.4 %
    – US 14.7 %
    – Argentina 7.4 %
    The US is an important partner but no longer the most important one, so why would they need the US Dollar for actually?
    Portugal will have problems – that is probably if they will be treated as the Greeks were. Interesting would be to see how politicians will spin this, as France will be also increasing deficit to found the army?

    • cdquarles says:

      Lars, there is something to remember, here, about that ‘deficit’. When there exists a ‘reserve’ currency, that currency must be exported to supply it to the rest of the world. Whether that’s gold or dollars or whatever, that will be the case. As long as that reserve currency is US dollars, we *have* to export them. When that becomes something else, whoever supplies them will have to export said currency. So, the ‘deficit’ you speak of isn’t a threat to the dollar. It is an economic requirement.

      Those countries need dollars to buy things only purchased and priced in dollars. As long as the currencies are cheaply convertible, it pays to keep the one where the ‘arbitrage’ makes the cost the least. Right now, that’s probably dollars. Will that continue to be true? For some time, yes. For how long, though, no one knows. That’s the, or, a threat to the dollar.

        • DirkH says:

          Oh, in the Bancor article it is mentioned that China already wants a switch from USD to IMF SDR’s (which is a compromise as SDR’s are again only a basket of Euro, USD, Yen, GBP). But, they are NOT happy that USA can pay its bills with the printing press.

          When Bretton Woods made USD the reserve currency the USD was still Gold backed. Triffin’s dilemma would normally have enforced a switch to a different currency when the USA’s Gold backing was removed in 1971.

          But, as we all know, Kissinger arranged a different kind of backing, the Petrodollar.

          Which is dying now.

        • cdquarles says:

          Indeed.

          The ‘dirty little secret’ about the petrodollar is that it was an implementation of the Bancor idea.

    • suyts says:

      Bancor and Triffin are about statist globalism. A “basket currency” ties my interests with the interests of people whom I share no interests. This is why the EU has failed. This is why misery is spread throughout the world.

      There is no separation between governance and economics. The governance dictates the economics and the economics mandates the governance.

      The USD, or a Ruble, or a Yuan, it doesn’t matter. There should be a standard. I believe the American people would be better off if the USD wasn’t the standard. But, we are and will continue to be until there is a stronger economy.

      A “basket” of currencies is simply another name for the UN, or a “new world order”. It can not be otherwise.

      It is the interests of the people which matters, or, should matter. Each currency and economics of each peoples and nations should only serve the interests of said peoples and nations. The interests of Brazil and Russia are not the same. And, the same can be said for all of the other nations involved in the “BRICS” idiocy. It was doomed for failure as sure as the EU was doomed. The only change which occurred was the increase of misery and debt to the people of the Euro.

      • Latitude says:

        + 1 trillion

      • Lars P says:

        Which is why I would think one can make easier directly exchanges between 2 countries based on their own currencies.
        For instance why to go to dollar for exchange between Brazil and Argentina? Eliminating the intermediary is always better. One could have the 2 country currencies pegged against gold (or dollar, whatever) and use these directly. Any differences could be covered with gold (or the reference).
        It is not a “gold standard” but a “gold reference” ?

        • DirkH says:

          Lars P says:
          November 26, 2015 at 3:54 am
          “Which is why I would think one can make easier directly exchanges between 2 countries based on their own currencies.
          For instance why to go to dollar for exchange between Brazil and Argentina? Eliminating the intermediary is always better.”

          These are the Swaplines – e g the Yuan swaplines between China, and Germany, Australia, Canada etc., respectively – imbalances in trade are accounted for in Yuan.
          Yuan only need to be bought or sold by one of the partners if imbalances occur.

          E.g. as long as the coal that Australia delivers to China is equally valuable as the electronics Australia gets from China, no Yuan need to be acquired or sold. It’s called a Yuan swapline because it uses the Yuan as currency.

      • DirkH says:

        “The interests of Brazil and Russia are not the same. And, the same can be said for all of the other nations involved in the “BRICS” idiocy. It was doomed for failure as sure as the EU was doomed. ”

        They do have a common interest: Stop delivering stuff to the US in exchange for the currency or debt of the USA which is worthless as the USA arbitrarily increases the money supply. Stacking US treasury bills ain’t the fun it used to be in the age of ZIRP and QE. Selling them quickly labels you a rogue nation.

        The decision to get rid of the Dollar fell when QE started. Think about it. You stored your life savings in Italian Lira and suddenly Italy begins printing Lira like mad. Wouldn’t you look for an alternative?

        Trade percentages up to 2012, EU vs US vs BRICS.
        http://ipezone.blogspot.de/2014/04/brics-guy-on-eus-road-to-smurfdom.html
        Up to 2014, US vs. China
        http://www.zerohedge.com/news/2015-05-20/where-does-gold-trade-stand

        • David A says:

          I agree Dirk, US policy is the greatest threat to the dollar. However who is really doing differently? Are we not engaged in a least ugly contest, with massive unfunded liabilities?
          I thank the dollar will be overthrown in continuing steps. Like James I think the replacement will fare no better and the least ugly contest will progress to a least suffering contest.

          Is Germany, not unlike the US, partially importing “refugees” in the hopes of funding these liabilities, something that will be impossible with current demographics? Of course, like most all statist policies it will have the opposite affect as these people will likely be a never ending burden and net negative cost to those nations. And that is, IMV, true even excluding the far greater cost of importing an ideology consisting of murder, an imposed caste system, and a statist religious totalitarian hierarchy.

          Additionally, economically speaking, robotics will likely make such hoped for employment demands unrealistic and only a unfettered free enterprise system could smoothly transition to a service economy in such a scenario.

          .

        • DirkH says:

          Yes and yes,
          Re demographics and robotics: While Japan counts as posterchild for stagnation with an aging population, their GDP/capita actually developed exactly like that of the USA (and others) since 1990.

          In my opinion, it is actually not a problem to feed twice the number of pensioners per working person compared to 50 years ago. As to medicine: You can wreck ANY economy with enough health expenditure; and you can ALWAYS expend more on sickcare, you don’t even need pensioners for that. This is just a question of priorities/resource allocation.

          All of this hinges only on one thing: Availability of energy. Because THAT’s what makes it possible to progress beyond slave / agrucultural society.

  3. Latitude says:

    I’ve thought about this….well, probably too much
    But I can’t honestly find anything wrong with it.

    Switzerland overwhelmingly votes for burqa ban with £6,500 fine for Muslim women who rebel

    “Those who want to integrate are welcome irrespective of their religion.
    “But those who rebuff our values and aim to build a parallel society based on religious laws, and want to place it over our society, are not welcome.”

    http://www.express.co.uk/news/world/622037/Switzerland-votes-burqa-ban-fine-Muslim-women

  4. Latitude says:

    Deadly kissing bugs reported in more than half of U.S., spreading Chagas disease

    There have been eight million cases in Latin America and South America because of poorly constructed rural homes, according to the CDC.

    http://www.nydailynews.com/news/national/deadly-kissing-bugs-reported-u-s-article-1.2446341

    Nearly 5K minors crossed U.S. border in October 2015, almost doubling last year

    Nearly 5,000 unaccompanied immigrant children were caught illegally crossing the U.S. border with Mexico in October, almost double the number from October 2014, according to U.S. Customs and Border Protection data.
    Also, in the figures released Tuesday, the number of family members crossing together nearly tripled from October 2014 — from 2,162 to 6,029.

    http://latino.foxnews.com/latino/news/2015/11/25/nearly-5k-minors-crossed-us-border-in-october-2015-almost-double-than-last-year/

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