New York, NY (PRWEB) August 04, 2012
In a recent Investment Contrarians article, editor Danny Esposito points out that Brazil, Russia, India, China, and South Africa, otherwise known as the BRICS countries, discussed the possibility, a few weeks ago, of setting up a foreign-exchange reserve pool and a currency-swap arrangement, in case a financial crisis breaks out in the West. Esposito believes the BRICS countries decided to come together three years ago, because they were tired of being pushed around by the West, especially the U.S.
BRICS represent over 40% of the worlds population and 20% of the worlds gross domestic product (GDP), comments Esposito. However, they are growing their portion of world GDP faster than the West, which means that, in just a few short years, the BRICS countries are going to represent a lot more than 20% of the worlds GDP.
Considering their growth rates and their prominence now in the world, Esposito notes the BRICS countries have grown up; they are not the little brothers the U.S. and the rest of the world can just push around: they are pushing back, he asserts.
Since the financial crisis in Europe continues to escalate, the BRICS countries decided they do not want to get caughtlike they did during the Lehman crisiswithout liquidity in their banking system, which will significantly hurt their economies, believes the Investment Contrarians editor.
They understand that as long as they are tied to the U.S. dollar and the euro, that illiquidity risk exists, says Esposito. The proposed foreign-exchange pool and currency swap agreements would be in the currencies of the BRICS countries themselves, outside of the use of the U.S. dollar and the euro. It would mean that, should a financial crisis occur, these countries would be capable of handling it themselves.
The BRICS countries are growing up and showing that they are not only capable of pushing back, but they are also ready to take over, concludes Esposito.
To see the full article and to get a real contrarian perspective on investing and the economy, visit Investment Contrarians at http://www.investmentcontrarians.com.
Investment Contrarians is a daily financial e-letter dedicated to helping investors make money by going against the herd mentality.
The editors of Investment Contrarians believe the stock market and the economy have been propped up since 2009 by artificially low interest rates, never-ending government borrowing and an unprecedented expansion of our money supply. The official unemployment numbers do not reflect people who have given up looking for work and are thus skewed. They believe the official inflation numbers are also not reflective of todays reality of rising prices.
After a 25- to 30-year down cycle in interest rates, the Investment Contrarians editors expect rapid inflation caused by huge government debt and money printing will eventually start us on a new cycle of rising interest rates.
Investment Contrarians provides unbiased research. They are independent analysts who love to research and comment on the economy and investing. The e-newsletters parent company, Lombardi Publishing Corporation, has been in business since 1986. Combined, their economists and analysts have over 100 years of investment experience.
Find out where Investment Contrarians editors see the risks and opportunities for investors in 2012 at http://www.investmentcontrarians.com.
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