By JC Collins
In a major validation of the POM thesis, it has been confirmed that the BRICS New Development Bank will receive funding for infrastructure development loans denominated in the domestic currencies of the member nations. Based on China’s large foreign exchange position, and growing international reserve position of the renminbi, it can be expected that China will contribute a large portion of this funding.
But that isn’t all. It has also been stated that both Standard Chartered, as well as Goldman Sachs, are being appointed as international ratings advisors to the NDB. This is a huge step towards developing the framework of the multilateral monetary system.
In fact, Russian Finance Minister Anton Siluanov, who also serves as the Chairman of the Board of Governors for the BRICS institution, stated the following:
“The NDB will soon become a strong and well-respected international financial institution, playing a leading role in the changing international financial architecture.”
The “changing international financial architecture” will be recognized by POM readers as the multilateral monetary framework which is progressively emerging from the remnants of the old unipolar dollar based system.
Any remaining “analytical” conclusions that the BRICS members would use this institution to take power away from western bankers should now, finally, be relegated to the dustbin of historical fabrication, fallacy, fault-ridden research, and time-wasted reading.
Remember it was Goldman Sachs Executive Jim O-Neill who first coined the term BRIC, in reference to the founding members of that socioeconomic alliance of emerging nations, Brazil, Russia, India, and China. South Africa was later added.
The first five loans, one issued by each member nation, will be announced in April, and will be focused on hydropower and electricity, with a priority on green energy projects.
There is a lot happening as I type. Over the next few days I will be providing additional articles on the coming commodities boom, as it appears a corner may have been turned, an article on the possibility of China signing on with the TPP, and the next Federal Reserve rate increase.
Also watch for the next lesson in the Fundamentals of Multilateral Investing series. – JC
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