BRICS, E7 Economies, and IBSA
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santosh10
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hmmmm, as i discussed in my last post#79 itself, even if you compare Russia with Mexico, Brazil, Argentina type Middle order countries, its only a comparison of 'economic size', similarly how CHina and India are bigger economic size than Russia.
but when you compare Russia in terms of HDI, per capita income etc, it suddenly fall with Poland type 'lower side of Developed Nations'. its a true European country, and is always put with them. we can't even compare it with the Middle Order countries like Mexico, Brazil etc..... we find Russia well falls in the category of the high HDI countries like Finland, for example. and thats why we would like to see the similar background countries like Finland, Russia come together in future
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santosh10
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The New Break Even of Russia's Oil Production Cost
sir, first we see Russia's Break Even of Oil Production cost has well fallen to $60 per barrel due to fall of ruble value. as discussed in my previous post of oil math, and as Russia budget is budgeted in Ruble value and they would hardly get 5% to upto 10% 'additional' inflation due to fall of Ruble value, new break even of oil production in Russia is calculated as below:
till early 2014, it was $100 per barrel, OR, 32.5 * 100 = '3,250' Ruble per barrel.
and by early 2015, considering its today's value at $60/barrel, at exchange rate of 1.0US$=62 Ruble, and Russia's Inflation seen at maximum of 11% by January due to fall of ruble value, while the Russia's Budget might be budgeted for the inflation at 6%, at least, considering inflation to this level by early 2014. the new break even of oil production cost in Russia comes around = 60*62*0.9 = '3,348' per barrel, a tooo safe side now for the oil production.....
hence, this type of dramatic fall of Ruble value, has put Russia on a very safe side of oil production cost, even if we used a factor of 0.9 considering even 10% 'additional' inflation. now its break even has well fallen to $60 per barrel international price.....
from here, regardless all the conspiracy theories, how fall in oil price affected Russia's economy, except giving them a good reason to depreciate their currency, which would now only help home industries of Russia, without any effects on their Budget Expenditure in Ruble value? i hardly find Ruble at par with Indian rupees right now, while its still twice to Japanese Yen even right now, for example.....
=>
while im so much angry with over valued Indian Rupees that i can't say.... even Brazilian currency was depreciated by over 25% during the second half of 2014, while so strong Indian rupees has made imported products so cheap that now they have so high trade deficit
and the only positive outcome is, even if India is a developing country, its wholesale inflation has approached zero value now, similar to the period of economic crisis of 2009 :cheers:
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santosh10
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@RayTrade deficit widens to $16.8 bn; gold imports surge 6-fold
India's trade deficit widened to one-and-a-half year high of USD 16.86 billion in November due to over six-fold jump in gold imports even as merchandise exports grew by 7.27 percent. Trade deficit in November last year was USD 9.57 billion. Gold imports stood at USD 5.61 billion in November this year as against USD 835.83 million in the corresponding month in 2013, according to the data released by the Commerce Ministry. Total imports in November, including oil, jumped by 26.79 percent to USD 42.82 billion. Oil imports dipped by 9.7 percent to USD 11.71 billion. Non-oil imports, however, grew by 49.6 per cent to USD 31.10 billion.Merchandise exports grew to USD 25.96 billion after recording a contraction in October. During April-November, imports were up 4.65 percent to USD 316.37 billion, while exports were up 5.02 percent to USD 215.75 billion. Trade deficit during this period stood at USD 100.61 billion as against USD 96.89 billion in the same period last fiscal.
Over Valued Indian Rupees is accepted only until Gold Import is High
sir, as discussed in my last post, INR is over valued by around 17.6% at present and its current value would be accepted only until we have high gold import at a cheap price at present. for example, if Indian Rupees depreciates by around 15%, its price in market will then be increased by at least 15% to bring it to well over 32,000 rupees per 10 gram, from its current value at around 27,300 rupees per 10 gram.....
and then it will obviously reduce Gold import, higher its price, lower will be its import. we want its high import until we buying it at a lower price due to over valued Indian rupees
while our experience of 2009 recession does state that gold was even exported during the peak of that recession, during the first quarter of 2009 when the rupees was depreciated by around 25% by late 2008, hence making its price in Indian rupees term in Indian market lower than its international price in dollar value, making its export in the first quarter of 2009. which helped India maintain respect on the trade deficit side during peak of that recession......
we simply can't compare Gold import to oil/manufactured products import which are used and gone. while gold is, in fact, the most valued form of foreign currency, showing a very high return on its investment, we saw its price rising in a similar fashion to oil price during 2001 to 2011 :tup:
and considering supply-demand concept, we always favor 'free floating'/market determined value of Gold. as, if there is a demand, it will finally benefit the middlemen if you put restrictions on its import, which then means for higher price of gold for its Indian Consumers, going to the pocket of smugglers.........
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santosh10
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Predicted Russia's Trade data's in 2014 Vs United States
sir, Russia isn't an economy like Saudi A, UAE whose only business is based on oil/gas export....... its a typical industrialized nation with a major earning through oil/gas export, and its share in export is well below 50% of Russia export......
from here, we have news that domestic oil consumption of US has been raised to 66%, from 33% in 2006 level, and this means for a change occurring in US's economy. labor force employment going only down since 2008 recession, never better than September 2008 level, with so high debt and only rising, as discussed in my last few posts of this thread....
i mean to say, exporting oil/gas isn't something a nation would do, and if US has to pump oil of its use, then its something shows their position of defence on the trade side....
while what exactly will happen to Russia's export side, as compare to US with so many sanctions, we will discuss later this year, when the list as below will be revised with the new trade data's. and write down somewhere, Russia's trade data would never be as bad as US, as below :tup:
(comparison of the 3rd highest trade surplus with the highest trade deficit.)
.
santosh10
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First Cut analysis UK's Economy
boss, just write down few very basic points about the UK's economy as below:
1st; UK's economy just recovered its pre-crisis level, while its per capita income adjusting inflation is still around 5% lower than early 2008.
2nd; Public Debt on UK is more than double to the early 2008 level.
3rd; hefty Budget Expenditure cuts have undermined their future growth prospects, obviously. and its now very less likely that UK or any of Eurozone economy would achieve their average growth rate during the last 20 years. as, what will drive the economy if you have cut all the budget expanding by whatever the possibility? UK+Eurozone economies never had this type of spending cuts anytime during last 40-50 years, while their average growth rate since 1990 is well below 2%, check....
for example, of my link of last few posts, US is suffering first drop of Mexican born population since WW2, is this the main reason behind so many wars organized in world? :ranger:
santosh10
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Brics agree to create development bank
Leaders of the Brics group of emerging economies on Wednesday announced they had agreed to set up a development bank that could ultimately challenge the influence of the Bretton Woods institutions, but they failed to produce any details on its size or structure. :ranger:
The push to create a bank was the key theme of the Brics summit in Durban that brought together leaders of Brazil, Russia, India, China and South Africa, with the move seen as a test of whether the club of nations can develop beyond a loose political grouping.
The five leaders unambiguously backed the development bank initiative and speeches were laced with calls for greater co-operation between Brics nations, amid references to a shifting world order as the west continues to grapple with its economic woes.
"The potential of Brics development is infinite," said Xi Jinping, China's new president. "The real potential of Brics co-operation is yet to be realised."
Jacob Zuma, South Africa's president, spoke of "the most dynamic emerging economies leading a structural shift in the global economy".
The leaders also agreed to establish a $100bn pool of foreign reserves to "contribute to strengthening the global financial safety net and complement existing international arrangements as an additional line of defence". But again, there were no details on how this would be structured or implemented.
The initiatives are attempts by the Brics nations, which together produce some 20 per cent of global GDP, to create formal institutions as they push for greater co-operation between members.
The plans for a bank and reserve pool also reflect frustrations with the perceived outdated western dominance of the World Bank and the International Monetary Fund.
The Brics countries had agreed to establish a bank "based on our own considerable infrastructure needs, which amount to around $4.5tn over the next five years, but also to co-operate with other emerging markets and developing countries in future", Mr Zuma said.
But officials said the group's finance ministers would continue to discuss how much capital the bank would have, its structure, the role of shareholders and its location.
A diplomat with one of the Brics members said there had been differences over whether to announce the size of the bank at the Durban meeting, saying there was "talk of $50bn or nothing at all".
Russia felt it was better to announce the bank's initial capital at a time when other details of the institution had also been agreed upon, the diplomat said.
However, a South African official said the remit of finance ministers since the concept of a bank was first raised at a Brics summit in New Delhi last March had been only to look at its "viability and feasibility".
"The [initial] capital has a huge impact on the voice of the shareholders," the official said, saying it would take at least a year to iron out some of the issues.
Pravin Gordhan, South Africa's finance minister, said there was a "great sense of urgency to establish the entity as soon as possible", adding at the appropriate time other developing countries could join.
The issue of capital had been discussed, he said, but there were "different views" on what that amount should be. "We need to make sure that we do the necessary technical work to come out with a number," he added.
"An observation that many of us would make as developing countries is that the roots of the IMF and World Bank still lie in the post-World War II environment," Mr Gordhan said. "The reforms that have been undertaken so far"‰."‰."‰."‰are inadequate in terms of reflecting current economic and other realities around the world."
Brics agree to create development bank - FT.com
Leaders of the Brics group of emerging economies on Wednesday announced they had agreed to set up a development bank that could ultimately challenge the influence of the Bretton Woods institutions, but they failed to produce any details on its size or structure. :ranger:
The push to create a bank was the key theme of the Brics summit in Durban that brought together leaders of Brazil, Russia, India, China and South Africa, with the move seen as a test of whether the club of nations can develop beyond a loose political grouping.
The five leaders unambiguously backed the development bank initiative and speeches were laced with calls for greater co-operation between Brics nations, amid references to a shifting world order as the west continues to grapple with its economic woes.
"The potential of Brics development is infinite," said Xi Jinping, China's new president. "The real potential of Brics co-operation is yet to be realised."
Jacob Zuma, South Africa's president, spoke of "the most dynamic emerging economies leading a structural shift in the global economy".
The leaders also agreed to establish a $100bn pool of foreign reserves to "contribute to strengthening the global financial safety net and complement existing international arrangements as an additional line of defence". But again, there were no details on how this would be structured or implemented.
The initiatives are attempts by the Brics nations, which together produce some 20 per cent of global GDP, to create formal institutions as they push for greater co-operation between members.
The plans for a bank and reserve pool also reflect frustrations with the perceived outdated western dominance of the World Bank and the International Monetary Fund.
The Brics countries had agreed to establish a bank "based on our own considerable infrastructure needs, which amount to around $4.5tn over the next five years, but also to co-operate with other emerging markets and developing countries in future", Mr Zuma said.
But officials said the group's finance ministers would continue to discuss how much capital the bank would have, its structure, the role of shareholders and its location.
A diplomat with one of the Brics members said there had been differences over whether to announce the size of the bank at the Durban meeting, saying there was "talk of $50bn or nothing at all".
Russia felt it was better to announce the bank's initial capital at a time when other details of the institution had also been agreed upon, the diplomat said.
However, a South African official said the remit of finance ministers since the concept of a bank was first raised at a Brics summit in New Delhi last March had been only to look at its "viability and feasibility".
"The [initial] capital has a huge impact on the voice of the shareholders," the official said, saying it would take at least a year to iron out some of the issues.
Pravin Gordhan, South Africa's finance minister, said there was a "great sense of urgency to establish the entity as soon as possible", adding at the appropriate time other developing countries could join.
The issue of capital had been discussed, he said, but there were "different views" on what that amount should be. "We need to make sure that we do the necessary technical work to come out with a number," he added.
"An observation that many of us would make as developing countries is that the roots of the IMF and World Bank still lie in the post-World War II environment," Mr Gordhan said. "The reforms that have been undertaken so far"‰."‰."‰."‰are inadequate in terms of reflecting current economic and other realities around the world."
Brics agree to create development bank - FT.com
santosh10
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Per Capita Income Comparison between India and UK
i gotto teach you this also now......
first, population of India at 1.2billion and exchange rate/nominal GDP of India as $2.1trillion by the financial year 2014-15, which is growing by at least 6% a year for the coming 20 years. write down somewhere and then talk from here? this way, per capita income of India in exchange rate terms comes at around $2,000 by end 2015, estimated. OK?
from here, first my post as below, which states, how $2,000 per capita income of India is equivalent to $15,000 in US. and only rationale question i would welcome, no shiits. why i used a factor of 7.5 to calculate "on ground" Purchasing Power Difference between India and US.....
now, what you understand by Per Capita Income? i tell you about it, it compromise with 80% service, 18% industries (mainly energy sector of UK), and 2% of Agriculture for UK's economy.
i mean to say, in UK, you spend your 80% earning in shops/restaurants and other services. while its around 55% only in India. means, out of $2,000 per capita income of India in exchange rate terms, with its equivalent value of $15,000 as detailed below, around 45% of it, around $6,700 on PPP has share in agriculture/industries.
and with UK's per capita income of around $36,000 ONLY, around 20% share you have for the agriculture and and industries, means around $7,200 on PPP has share of agriculture and industries. EQUAL TO THAT OF INDIA, 'almost'.
and yes, this way you spend around $28,000 per head of your income in services, while that of India comes around $9,000 THREE TIMES DIFFERENCE ONLY. and this is why you may say you still maintain superiority over the common Indians, with over 500% Total Debt on your head, as much as Japan, the highest indebted people of world
from here, 3 times difference of Per Capita income used in Services has little value, as whole. frequently having food in restaurants/ going to shops etc, doesn't make much difference in quality of life, considering your per head expenditure on agriculture and industries is 'almost' similar to that of Indians as present, whose total debt hardly comes around closed to 100% to GDP, with GDP growing with a very fast pace, at least by 6% a year for the next 20years+ :tup:
while you going no where in future
//defenceforumindia.com/forum/economy-infrastructure/64395-brics-e7-economies-ibsa-4.html
santosh10
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@jouni
by the virtue of facts,"non-taxable income" is always lower paid than the taxable income. and, highest number of illegals of Australia are the British passport holders, not the Afghan refugees...
most of the Brits, not even high school passed,straight go to the mine site for any type of job, dont get $10/hour minimum wage as an illegal workers, and this is how they talk on the world platform....
by the virtue of facts,"non-taxable income" is always lower paid than the taxable income. and, highest number of illegals of Australia are the British passport holders, not the Afghan refugees...
most of the Brits, not even high school passed,straight go to the mine site for any type of job, dont get $10/hour minimum wage as an illegal workers, and this is how they talk on the world platform....
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santosh10
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Per Capita Income Comparison between India and UK
i gotto teach you this also now......
first, population of India at 1.2billion and exchange rate/nominal GDP of India as $2.1trillion by the financial year 2014-15, which is growing by at least 6% a year for the coming 20 years. write down somewhere and then talk from here? this way, per capita income of India in exchange rate terms comes at around $2,000 by end 2015, estimated. OK?
from here, first my post as below, which states, how $2,000 per capita income of India is equivalent to $15,000 in US. and only rationale question i would welcome, no shiits. why i used a factor of 7.5 to calculate "on ground" Purchasing Power Difference between India and US.....
now, what you understand by Per Capita Income? i tell you about it, it compromise with 80% service, 18% industries (mainly energy sector of UK), and 2% of Agriculture for UK's economy.
i mean to say, in UK, you spend your 80% earning in shops/restaurants and other services. while its around 55% only in India. means, out of $2,000 per capita income of India in exchange rate terms, with its equivalent value of $15,000 as detailed below, around 45% of it, around $6,700 on PPP has share in agriculture/industries.
and with UK's per capita income of around $36,000 ONLY, around 20% share you have for the agriculture and and industries, means around $7,200 on PPP has share of agriculture and industries. EQUAL TO THAT OF INDIA, 'almost'.
and yes, this way you spend around $28,000 per head of your income in services, while that of India comes around $9,000 THREE TIMES DIFFERENCE ONLY. and this is why you may say you still maintain superiority over the common Indians, with over 500% Total Debt on your head, as much as Japan, the highest indebted people of world
from here, 3 times difference of Per Capita income used in Services has little value, as whole. frequently having food in restaurants/ going to shops etc, doesn't make much difference in quality of life, considering your per head expenditure on agriculture and industries is 'almost' similar to that of Indians as present, whose total debt hardly comes around closed to 100% to GDP, with GDP growing with a very fast pace, at least by 6% a year for the next 20years+ :tup:
while you going no where in future
//defenceforumindia.com/forum/economy-infrastructure/64395-brics-e7-economies-ibsa-4.html
Comparing Debt on India and Britain
hmmmm, i myself lost little passions on morning, as things aren't easy for me, its true.... committing crimes on my name is, in fact, part of foreign policy of US/UK ......
here, i just want to complete the above comparison of India and UK.
as below, we do see India has around 130% Total Debt to GDP, while that of UK well cross 500%. the Total Debt, which includes Government Debt, Household Debt, Business debt etc.
and hence, if Per Capita Income of Brit stands at around $36,000 then total debt per head comes at around $180,000 this way, 500% to GDP, while that of India at around $2,500 per heard only, at 130% to GDP
. "72 times more"JOKING..... really, and its true. and its further to the post when we compared per capita income of India at $2,000 with UK at $36,000 and both of these 2 news are jokes, in fact.
and how would i compare India with UK in this category also? then again i would use the factor of '7.5', hence bringing Debt on the common Indian civilians at $20,000 per head this way, ($2000*7.5*1.30), as compared to UK's $180,00 per head :thumb:
=> and if we talk more on this topic, then, it hasn't considered the factor of imported manufactured products. but this is same for UK and India both, Indian firms just achieved domestic supplies to over 50%, with rest are exported. and the same for UK too, you import something then something is exported from your firms too....
while i said Total Debt on India closed to 100% of GDP, then it was considering the fact that Indian Household Debt at around 30% to GDP is almost less than the total gold reserves in these houses of India, around 25,000 tons+ estimated (valued $1.0trillion+ in current market rate.)
with that, Government Debt includes Public Debt and Foreign Debt both, while Foreign reserve of India is around 80%+ to its total foreign debt, around $320bil+. .....
hence, even if Total Debt of India is around 135% to its GDP, i would say it around hardly 100% toGDP :ranger:
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santosh10
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Comparing an Emerging Economy with a Matured/"saturated" Economy
and with Total Debt, when you want to compare UK's GDP with India, the very basic of comparing with this emerging economy is as below.
when you say Per Capita Income of UK at $36,000 then its mean for that. here you are,no change. per capita income of UK adjusting inflation still around 5% less than the early 2008, pre-crisis level, then its because they had around 0.75% population growth during the last 7 years to 2014, so even if you have achieved you pre-crisis level. hence even if it reaches its average GDP growth rate of 1.5% since 1990, check, it would hardly help it get its per capita income level of early 2008 by 2020, hopefully.......
means, if Per Capita income of UK is around $36,000 right now, then here you stand even after 5-6 years. and for many years.considering you willnot face any economic crisis like how Russia faced during 90s, considering so high debt and budget cuts in Western Europe as whole....
but when i talked about India, i said, its GDP in Nominal/Exchange Rate term at $2.1 trillions by the financial year 2014-15. hence per capita income at $2,000 by end 2015, here they would have spending power for the year 2015, starting after a week. why? then this is how India's GDP change in just one year, as below. even if its growth was slowed for the last 2 financial years, which has picked up again since this year too, its GDP is more than 50% to its early 2008 level, to pre-crisis level :ranger:
and with Total Debt, when you want to compare UK's GDP with India, the very basic of comparing with this emerging economy is as below.
when you say Per Capita Income of UK at $36,000 then its mean for that. here you are,no change. per capita income of UK adjusting inflation still around 5% less than the early 2008, pre-crisis level, then its because they had around 0.75% population growth during the last 7 years to 2014, so even if you have achieved you pre-crisis level. hence even if it reaches its average GDP growth rate of 1.5% since 1990, check, it would hardly help it get its per capita income level of early 2008 by 2020, hopefully.......
means, if Per Capita income of UK is around $36,000 right now, then here you stand even after 5-6 years. and for many years.considering you willnot face any economic crisis like how Russia faced during 90s, considering so high debt and budget cuts in Western Europe as whole....
but when i talked about India, i said, its GDP in Nominal/Exchange Rate term at $2.1 trillions by the financial year 2014-15. hence per capita income at $2,000 by end 2015, here they would have spending power for the year 2015, starting after a week. why? then this is how India's GDP change in just one year, as below. even if its growth was slowed for the last 2 financial years, which has picked up again since this year too, its GDP is more than 50% to its early 2008 level, to pre-crisis level :ranger:
santosh10
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.
Taking Over all the Government Departments of India
how this idea came, to scrap the planning commission?
even if this man wants to start something regarding infrastructure only, its a welcome approach, but how can he even scrap the planning commission?
he simply can't transfer every department to the ministry, he simply can't try to take over all the government departments of India, specially the Planning Commission
=>
we generally favor, "Make in India for the Domestic Supplies", with the excess to be exported.....
we simply dont favor the economy to be dependent on the external demands.....
Taking Over all the Government Departments of India
My Comment:-
how this idea came, to scrap the planning commission?
even if this man wants to start something regarding infrastructure only, its a welcome approach, but how can he even scrap the planning commission?
he simply can't transfer every department to the ministry, he simply can't try to take over all the government departments of India, specially the Planning Commission
=>
My Comment:-
we generally favor, "Make in India for the Domestic Supplies", with the excess to be exported.....
we simply dont favor the economy to be dependent on the external demands.....
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santosh10
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No longer emerging, BRICS have arrived
The five-nation group is no longer an emerging group but a powerful agglomeration that is setting down the rules of global economic engagement for the coming decades.
In 1983 Belgian economist Paul Bairoch presented a detailed study of the world economy that caused a furore in Western academic and political circles. In 'Economics and World History: Myths and Paradoxes' he said that in 1750 India's share of global GDP was 24.5 percent, China's 33 percent, and the combined share of Britain and the US was 2 percent.
Shaken by these facts, the Organisation for Economic Cooperation and Development, a largely Western club, constituted a Development Institute Studies under professor Angus Maddisson of the University of Groningen to investigate Bairoch's claims.
The data Maddison compiled affirmed – what nearly all Indian school children knew but was mysteriously unknown to the West – that India and China were the biggest economies in the world for almost all of the past 2000 years. His figures showed India was the leading economic power of the world from the first year of the millennium till 1700 – that's 18 of the last 20 centuries. India had 32 percent share of world's GDP in the first 1000 years and 28-24 percent in the second millennium till 1700. :ranger:
Since Bairoch and Maddison presented those paradigm shifting studies, things have progressed at warp speed. According to the International Monetary Fund, last year was the first in which emerging markets accounted for more than half of world GDP on the basis of purchasing power. Four large countries of the BRICS group – Brazil, Russia, India and China – are today the only $1 trillion economies outside the OECD and are also four of the 10 largest national economies in the world.
Strength and speed of growth
Much as Western outfits such as the New York Times would like to keep repeating the BRICS are fragile, it is abundantly clear the five-nation group has been the engine that has rescued a flat-lining global economy. The international consultancy Grant Thornton says BRICS are no longer emerging but in a different class just below the developed ones. Jim O'Neill, who coined the term BRIC, says it's "idiotic and insulting" to call them emerging economies. He argues these economies are "increasingly the driver of everything positive in the world economy" and that they should be called "growth markets."
A PriceWaterhouseCoopers (PwC) study titled 'World in 2050' says the collective strength of the BRICs economies is of ever increasing importance to the strength of the global economy. "Whilst mature economies across the globe grapple with towering budget deficits, anaemic growth and rising unemployment, the BRICs are expanding rapidly, lifting people out of poverty and driving the global economy. The manner in which leaders in the troubled eurozone recently pleaded with these markets for funds to help alleviate the sovereign debt crisis marks yet another definitive step in the transition of economic power from 'west' to 'east'." :ranger:
How the world will turn
PwC says China is projected to overtake the US as the largest economy by 2017 in purchasing power parity (PPP) terms and by 2027 in market exchange rate terms. India should become the third 'global economic giant' by 2050, a long way ahead of Brazil, which is expected to move up to fourth place ahead of Japan. Russia could overtake Germany to become the largest European economy before 2020 in PPP terms and by around 2035 at market exchange rates.
In areas like ICT, biotechnology and nanotechnology, China and India will play an increasing role in these developments in future decades. This will further fuel their catch-up process with the more sluggish advanced economies.
Decline of the dollar
Twenty years ago, travellers wanting to exchange roubles or rupees would have been welcomed only at the international airports of the countries that issued these currencies. Today, Indian rupees can be exchanged at small banks in Australia and New Zealand. The acceptance of any currency is simply a sign of the confidence in the issuing country's economy and trade.
In a paper titled 'The Renminbi Bloc is Here', Arvind Subramanian and Martin Kessler of the US-based Peterson Institute for International Economics provide a dramatic picture of how the RMB is growing in strength while the US dollar weakens.
Firstly, they say the RMB is already the dominant reference currency in India and South Africa. Secondly, since mid-2010 the RMB has made dramatic strides as a reference currency compared with the dollar and euro.
"The RMB has now become the dominant reference currency in East Asia, eclipsing the dollar and the euro"¦.The currencies of South Korea, Indonesia, Malaysia, the Philippines, Taiwan, Singapore, and Thailand now more closely track the RMB than the dollar. The dollar's dominance as reference currency in East Asia is now limited to Hong Kong (by virtue of the peg), Vietnam and Mongolia." :ranger:
And they provide this chilling assessment: "The dollar and the euro still play a greater role beyond their natural spheres of influence than does the RMB but that is changing in favour of the RMB."
Why chilling? The India-Iran rupee trade, Russia-Iran rouble trade and the worldwide acceptance of the RMB will slowly erode the prestige of the US dollar, which will have dire consequences for American prosperity. As a nation that has greatly benefited from – and exploited – the dollar's reserve currency status, the end of the Dollar Raj will mean a severe decline in American incomes and the country's ability to project power.
West still in the game
The rise – or to use Indian National Security Advisor Shiv Shankar Menon's word "re-rise" – of the BRICS doesn't mean the West will fade away soon. While its share of the global economic pie will decline substantially, Western prosperity will decline only in relative terms. PwC says the US is projected to retain its top spot on average income levels in 2050, while large emerging countries such as China, Brazil, Indonesia and India still sit at the bottom of the income table.
However, the GDP per capita differentials between the two groups of countries are projected to close significantly. For instance, China's GDP per capita as a proportion of US levels is expected to increase from 18 percent in 2011 to 44 percent in 2050. :ranger:
For higher valued products and services, the US and EU markets will still remain attractive locations given their more affluent consumers, although emerging market multinationals can expect to achieve an increasingly strong position in these markets over time as they move up the value chain.
Future of the BRICS
Currently, the BRICS countries together account for more than a quarter of the world's land area, more than 40 percent of the world population and around 35 percent of global foreign exchange reserves.
The BRICS economies are collectively worth around $12 trillion, and will surpass the size of the US economy which is approximately $15 trillion, by 2015. Former Goldman Sachs economist Jim O'Neill estimates that by 2020 the combined GDP of the four original BRIC members will be around $25 trillion.
What makes the BRICS story so compelling and attractive to countries – from South America to Africa – is the very nature of this rainbow collation. Each country is completely different from the others not only in terms of race and colour but also in economic systems and religion. The group's objectives are global rather than regional or local, and this is primarily owing to its DNA belonging to the Russia-India-China triangular organised by Moscow in the 1990s.
With the Western democracies becoming dysfunctional, the economic success of the BRICS may finally establish a multipolar world where smaller countries have the freedom and opportunity to have a shot at prosperity. It could finally make the world a fairer place.
santosh10
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@Ray @asianobserve
its mainly because of a sharp depreciation of Russian Ruble, Euro, and Brazilian Real and other currencies w.r.t. to US$. and it does show strength of US$ as compare to other currencies :thumb:
i find only Indian Rupees stronger, maintained at its level during whole 2014. which i won't like to see, as it does give a disadvantage to Indian exported as compare to its foreign competitors. but again, it does show strength of Indian rupees too
i bought ruble at 2 lacs for 100k ruble a year before, while now Indian Rupees is well above par to Ruble at present. similarly, we find imported products from EU much cheaper, hence helping India's trade deficit this way too. :thumb:
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California overtook Russia and Italy to be the World's 8th biggest economy in 2013, well before Russia's economic malaise due to sanctions and plunge in oil prices. Please read more.@Ray @asianobserve
its mainly because of a sharp depreciation of Russian Ruble, Euro, and Brazilian Real and other currencies w.r.t. to US$. and it does show strength of US$ as compare to other currencies :thumb:
i find only Indian Rupees stronger, maintained at its level during whole 2014. which i won't like to see, as it does give a disadvantage to Indian exported as compare to its foreign competitors. but again, it does show strength of Indian rupees too
i bought ruble at 2 lacs for 100k ruble a year before, while now Indian Rupees is well above par to Ruble at present. similarly, we find imported products from EU much cheaper, hence helping India's trade deficit this way too. :thumb:
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