BRICS kick starts $100bn reserve currency pool (or bye-bye reserve petro dollar...)

Published time: July 08, 2015 09:17
Edited time: July 08, 2015 10:01

http://rt.com/business/272362-brics-currency-pool-agreement/

Participants in the BRICS Finance Ministers and Central Bank Governors’ Meeting, Meeting of the Board of Governors of the BRICS New Development Bank (RIA Novosti / Vladimir Fedorenko)

The Central banks of BRICS countries have signed an operating agreement on the currency reserve pool, according to Central Bank of Russia. The $100 billion pool aims to protect BRICS member states from currency volatility shocks.
BRICS/SCO summits in Russian city of Ufa LIVE UPDATES
The agreement was signed Tuesday in Moscow after the meeting of the Finance Ministers and Chiefs heads of the Central Banks of BRICS, the statement of the Central Bank of Russia (CBR) said. It contains a detailed description of the procedures which are carried out by the central banks of BRICS states – the emerging economies of Brazil, Russia, India, China and South Africa - within the currency reserve pool, defines their rights and duties.
It will come into force on 30 July, according to the CBR head Elvira Nabiullina. She added that several other documents will be adopted to regulate the operation of governing bodies - the Governing Council and the Standing Committee.
China will make the biggest contribution to the pool: $41 billion. Russia, Brazil and India will donate $18 billion each, while South Africa’s investment will be $5 billion.

Read morePutin ratifies BRICS $100bn currency pool deal

Nabiullina explained that so far the money remain on the banks’ balance sheets and will be unlocked as soon as any of the BRICS member states ask for help.
In May, Russian President Vladimir Putin ratified a deal to establish a $100 billion foreign currency reserve pool for the BRICS group.
Last July, Russia, Brazil, India, China and South Africa signed the document to a reserve currency pool worth over $100 billion as well as $100 billion BRICS Development Bank.
The goal of the pool is to give BRICS member states opportunity to provide each other financial assistance in case of problems with their balance of payments.
Earlier, Putin said that Russia expects to launch the $100-billion BRICS New Development Bank along with a currency reserve pool at the BRICS summit in Ufa, Russia, which kicked off Wednesday.

Bad omen? The stock market has officially entered crazy town territory

Posted on December 30, 2013 - http://theextinctionprotocol.wordpress.com/2013/12/30/bad-omen-the-stock-market-has-officially-entered-crazy-town-territory/

The 2013 stock market’s bull run appears to be following the almost identical trajectory of the stock market in 1929 before the great crash, which led to the Great Depression.

December 30, 2013 – FINANCE - It is time to crank up the Looney Tunes theme song because Wall Street has officially entered crazytown territory. Stocks just keep going higher and higher, and at this point what is happening in the stock market does not bear any resemblance to what is going on in the overall economy whatsoever. So how long can this irrational state of affairs possibly continue? Stocks seem to go up no matter what happens. If there is good news, stocks go up. If there is bad news, stocks go up. If there is no news, stocks go up. On Thursday, the day after Christmas, the Dow was up another 122 points to another new all-time record high. In fact, the Dow has had an astonishing 50 record high closes this year. This reminds me of the kind of euphoria that we witnessed during the peak of the housing bubble.  At the time, housing prices just kept going higher and higher and everyone rushed to buy before they were “priced out of the market.” But we all know how that ended, and this stock market bubble is headed for a similar ending. It is almost as if Wall Street has not learned any lessons from the last two major stock market crashes at all. Just look at Twitter. At the current price, Twitter is supposedly worth 40.7 BILLION dollars. But Twitter is not profitable. It is a seven-year-old company that has never made a single dollar of profit. 

In fact, Twitter actually lost 64.6 million dollars last quarter alone. And Twitter is expected to continue losing money for all of 2015 as well. But Twitter stock is up 82 percent over the last 30 days, and nobody can really give a rational reason for why this is happening. Overall, the Dow is up more than 25 percent so far this year. Unless something really weird happens over the next few days, it will be the best year for the Dow since 1996. It has been a wonderful run for Wall Street. Unfortunately, there are a whole host of signs that we have entered very dangerous territory. The median price-to-earnings ratio on the S&P 500 has reached an all-time record high, and margin debt at the New York Stock Exchange has reached a level that we have never seen before. In other words, stocks are massively overpriced and people have been borrowing huge amounts of money to buy stocks. These are behaviors that we also saw just before the last two stock market bubbles burst. And of course the most troubling sign is that even as the stock market soars to unprecedented heights, the state of the overall U.S. economy is actually getting worse… 

-During the last full week before Christmas, U.S. store visits were 21 percent lower than a year earlier and retail sales were 3.1 percent lower than a year earlier. -The number of mortgage applications just hit a new 13 year low. -The yield on 10 year U.S. Treasuries just hit 3 percent. For many more signs like this, please see my previous article entitled “37 Reasons Why ‘The Economic Recovery Of 2013′ Is A Giant Lie.” And most Americans don’t realize this, but the U.S. financial system and the overall U.S. economy are now in much weaker condition than they were the last time we had a major financial crash back in 2008. Employment is at a much lower level than it was back then and our banking system is much more vulnerable than it was back then. Just before the last financial crash, the U.S. national debt was sitting at about 10 trillion dollars, but today it has risen to more than 17.2 trillion dollars. The following excerpt from a recent article posted on thedailycrux.com contains even more facts and figures which show how our “balance sheet numbers” continue to get even worse… –Economic Collapse