BRICS will create a bank to end hegemony of Europe and the U.S.

The bank will be the headquarters for trade in multiple currencies which do not include the dollar or the euro as references.

By LUIS MIRANDA | THE REAL AGENDA | MARCH 27, 2013

The first day of the fifth annual summit of BRICS (Brazil, Russia, India, China and South Africa) was dedicated to the bilateral relations of its members, and it served to meet the intent of the five members on Wednesday who issued a joint statement on the commissioning of a bank, which would serve as a counterweight to the World Bank and the International Monetary Fund. The BRICS consider both institutions excessively controlled by Europe and the United States.

Issues such as decision-making or the contribution of each member are yet to be decided, which will likely prevent the release of the specific plans for the bank today, ahead of the meeting of Finance Ministers.

The creation of a joint fund of foreign exchange reserves will be another issue on the table, and the establishment of a self-study center and a business council of the BRICS.

Furthermore, the investments that BRICS make in Africa will be one of the key issues to be addressed at the summit today. “The association of the BRICS and Africa for the development, integration and industrialization” will be the slogan used to bring everyone together during the discussion.

The South African Minister of Trade and Industry, Rob Davies, stressed the importance of economic relations between the five and the mainland during his speech to businessmen from all members in the Business Forum of the BRICS.

“The African continent is recognized as the second fastest growing after Asia,” Davies recalled, citing the need for infrastructure as one of the attractions for investing in Africa at this time of economic crisis in Europe and the U.S..

A study by the Standard Bank, the BRICS trade with Africa rose last year to 340,000 million dollars, far exceeding the number of exchanges between the five economies of the group.

Moreover, the currency swap agreement reached by Brazil and China has a value of 30,000 million dollars, said the president of the Brazilian Central Bank, Alexandre Tombini, in the South African city of Durban. “The objective is to facilitate trade between the two countries regardless of international financial conditions,” said Tombini.

The agreement is valid for three years and protects trade between the two economies against dollar fluctuations and international financial turmoil.

The Brazilian Finance Minister Guido Mantega told reporters that, along with their counterparts from the BRICS, he proposed to the presidents of their countries to create an agreement of the same type in a multilateral way among all partners.

In the intense round of bilateral meetings which marked the first day of the summit, South African President and summit host, Jacob Zuma, met with colleagues from China, Xi Jinping, Russia, Vladimir Putin, and Brazil, Dilma Rousseff. For his part, the president of Brazil did the same with Prime Minister Manmohan Singh.

Rousseff meets today with the president of China, the largest trading partner of Brazil, according to Brazilian sources who are part of the  country’s delegation in South Africa.

Moreover, the human rights organization Human Rights Watch (HRW) today took an opportunity to urge the BRICS to stop the Syrian conflict and to require an “immediate cessation” of “indiscriminate” violence against civilians. In a statement, HRW called for India, Brazil and South Africa to “pressure” to Russia and China, which have good relations with Damascus to “suspend weapons sales and assisting the Syrian government.”

BRICS countries account for about 42 percent of the world’s population and nearly 45 percent of the labor force on the planet, according to the group’s own figures. In 2012, Brazil, Russia, India, China and South Africa accounted for 21 percent of world’s GDP and trade between them reached a total of 282,000 million.

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The fiscal crisis in the United States is near, and it won’t be pretty

By LUIS MIRANDA | THE REAL AGENDA | MARCH 5, 2013

When one hears talks about the collapse of the dollar, it is hard to picture how a currency that is the base of all global transactions can simply disappear. An important point to understand is that such a collapse does not occur at once. It takes a while to happen because that is how it has been arranged. What most people are clueless about is that, not only is the death of the dollar possible, but that it has already started.

Since the dollar became the world’s currency by design, the American currency has lost a great deal of value. According to the U.S. Bureau of Labor and Statistics, one dollar today is worth only about 5% of what the green back was worth back in 1913. More recent signs of the loss of relevance the dollar has had in the global economy is the fact that major commercial power houses –American commercial partners and foes– have officially adopted new ways to conduct commercial transactions. For example, China and Russia are now using their own currencies to deal with the purchase and sale of products. Another case is that of India and Japan. They have also resourced to their own currencies to carry out trade.

The dollar has not only lost value, but also credibility. The origin of the lack of trust on what once was the base currency on which every single product and service was priced –including gold– is the United States’ thirst for debt as a ‘development’ model. Today more than ever before, the American government depends on the issuance of debt as a way to keep up with its spending. For that reason, the country’s central bank, the Federal Reserve, has come up with all kinds of circus moves to slow down an outcome that seems imminent: the complete collapse of the U.S. dollar currency.

The influence of the Fed in the way the U.S. manages its debt to GDP ratio stems from the country’s inability to make payments on the cash it has borrowed from the Fed itself, as well as China and other foreign investors who own much of the American debt. The path chosen by the Fed to temporarily deal with the American inability to make payments on its debt –which continues to grow out of control with every passing day– is to make large purchases of government bonds and to use quantitative easing –the pumping of unlimited amounts of electronic money– in an attempt to make everyone feel good about the state of the economy.

The Fed’s intention is to make clear to the world that the U.S. has meaningful ways to prevent a default, because since all important transactions are carried out in dollars and the dollar is the world’s currency, the private central bank can issue fake money for as long as it wants. The obvious consequence of indefinitely pumping cash into the economy is hyperinflation, which has not happened because banks were ordered not to put the money they were given out into the market in the form of loans.

It seems that the Fed has everything figured out and that the collapse of the dollar will not come as soon as some economists have predicted, but the reality is very different. According to a study conducted by four prominent economists, it is almost crunch time for the Fed and the U.S. government. Right now, the least of the problems for the central bank and the American government is not lack of credibility, but a strong change of a fiscal crisis. The report was prepared by David Greenlaw, Managing Director and Chief U.S. Fixed Income Economist at Morgan Stanley; James D. Hamilton, Professor of Economics at University of California at San Diego and Research Associate of the National Bureau of Economic Research; Peter Hooper, Managing Director and Chief Economist, Deutsche Bank Securities Inc; and Frederic S. Mishkin, Alfred Lerner Professor of Banking and Financial Institutions, a Graduate of the School of Business at Columbia University and former Chairman of the Federal Reserve Bank.

What these four men found, is that the actions of the Federal Reserve caused massive inflation to a level where the dollar’s purchasing power has gone down in free fall . As the very same Federal Reserve policy books say, the goal is to devalue the currency by at least another 30 percent. The 89-page report states that reductions in fiscal revenues and excessive increase in government spending, the close relationship between sovereign debt and the levels of interests to be paid on the debt, a significant relation between debt loans and borrowing costs and the direct effects of the fiscal crises on monetary policy have been combined to render a single outcome: massive losses for countries and institutions such as the U.S. Federal Reserve that will exceed available capital.

What this means is that, if things continue business as usual, even the Fed will become unable to sustain the current fiscal crisis. According to the report, the Fed may enter unknown territory where the amount of debt created will exceed its capital holdings. What will happen when the Fed gets to its limit and can no longer maintain the current debt-based system? According to the authors, the more a country’s debt is held by foreigners the greater the political incentives for the government to default on that debt. This is what has been seen in developing countries. The day of reckoning for the Fed may come as early as 2016. If better fiscal and monetary policies are adopted, the disaster could be put off until 2018.

It is then necessary to remember who are the United States’ investors. As of December of 2012, the Federal Reserve System, which is a branch of the international banking cartel came up as first. In second place is China, with $1202.9 billion. After China, other countries like Japan, Brazil, Switzerland and Russia appear in third, fourth and fifth places. With the U.S. debt reaching and passing 100% of its GDP and the government borrowing and printing money as if it were going out of fashion, the only possible outcome is what we have seen in modern cases of fiscal irresponsibility.

Countries get in debt up to their eye balls to fulfill the promises made at home during by irresponsible politicians during political campaigns. Since the government does not have any money to actually pay for the expenses it creates, it is only ‘normal’ to get in debt to be able to meet demands for more social programs and to pay interests on old debt. But since the governments do not borrow locally, they subject their country, (i.e. the people) to having to work all their lives to make payments on the debt generated on the debt it has gotten into. The ability of a government to make debt payments is finite. Cases in point Argentina in 199o, Greece in 2008 to 2012, Portugal and Spain in 2013 and the looming fiscal crisis the United States will have to face in the near future.

The supposed programs to help nations pay their debt is nothing more than an attempt to slow the collapse of the global economy and the that assures foreign debt holders they will have enough time to loot the countries for all they have gotten. That is the ultimate form of payment used by the international banking cartel uses to recover their so-called investments. Different from Argentina, Greece, Portugal and Spain, it is hard to see how the Americans will allow the bankers to suck every drop of blood for not paying its debt, which is why negotiations have been held to find the least painful way to phase the dollar out. Although the bankers want every single penny back, they prefer to get it in the most peaceful way possible as supposed to having to face street protests as it has happened in Egypt, Libya, Syria, Argentina, Spain and Portugal.

In conclusion, the current system of debt creation as the base for development has reached the end of its life cycle. The consequences to come should the United States continue to print or issue fake money to pay its debt instead of cutting down spending and making big international corporations liable for evading the payment of corporate taxes, will make it impossible for the U.S. government to pay its debt and for the Fed to issue fake money to sustain the current system. The only reason the U.S. has not collapsed as a debtor nation is due to the demand for U.S. Treasuries at home and abroad, which has been maintained due to the dollar’s status as the world currency. That status however, is a subjective and ephimerous concept. The moment more nations decide to trade with their own currencies, or to set up sound monetary systems such as the one Muammar Gaddafi intended to create in Libya –the gold dinar–, the more credibility and trust the dollar will lose. Lack of trust and the impossibility to meet fiscal obligations will end up destroying the dollar.

As the authors put it simply, high debt leads to higher interest rates and higher debt. The high levels of debt reach a tipping point –fiscal crisis– in which the interest rate shoots up. In the case of the U.S. it has many of the possible triggers of that shoot up in interest rates and the only thing that is holding them from going through the roof is an imaginary belief that the U.S. is still that powerful economic entity that it appeared to be many years ago.

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Latin America Infiltrated by Statists, Socialists and Fake Free Marketeers

By LUIS MIRANDA | THE REAL AGENDA | JUNE 13, 2012

The numbers and types of Statist, Socialist and Corporate Capitalists in power around Latin America have grown exponentially in the last two decades, and with them so have the masses of well-meaning people who believe their lies about social justice, the goodness of big government and the advantages of service economies sponsored by the most powerful corporations in the planet. Some of these corporations, by the way, have bigger revenues than many nations from that region and the world. As if the emergence of those movements was not bad enough, lately, the heads of socialist, statist and false free market groups have united to form more easily controllable commercial and political alliances, which they say, will bring real development to their countries and their people.

The most recent of those alliances is the one formed by Chile, Peru, Colombia and Mexico, called the Pacific Alliance. According to the front men who act as the creators, — the presidents of the four countries — the alliance is an effort to unite and to seek the realization of common goals. Chile, Mexico, Peru and Colombia are a handful of Latin American states with the least damaged economies in the region. In fact, Chile has become a story of success in the last decade or so, given its application of policies which have allowed for decent growth based on the country’s appetite for saving. However, Peru, Colombia and Mexico are a different story, which begs the question, why would Chile go into business with well-known corporate controlled failed states?

Mexico has for many years worked under the auspices of the United States, partnering on the infamous North America Free Trade Agreement (NAFTA), which has been charged with eliminating the industrial production of the US by design, permitting the free movement of people — illegal aliens — from the south to the north, while rewarding companies that move their operations outside American soil and avoiding corporate taxes, among others. Peru is a different story. Its past has always been highlighted by poverty, government corruption, and statist rule. This last aspect has not changed a bit. The country went from Alberto Fujimori to the current Peruvian leader Ollanta Humala, who rose to power in 2011. He is recognized as a anti-market extremist.

Meanwhile, Colombia is perhaps the strangest ally in a group that supposedly seeks development and free trade. Colombia, just as Mexico has been a close friend of the United States in the failed war on drugs, which has proven an insufficient and poorly managed effort to curb drug trade and the violence that stems from the existence of armed groups and governments controlling the flow of narcotics. In reality, the so-called war on drug trade is a facade to hide the worldwide campaign for the control of illegal drugs, their markets and the billions of dollars in profits that are laundered  every year by the largest banks on the face of the planet.

Groups such as the Pacific Alliance are not more than controlled dissidence, easily manageable by their sponsors. In Latin America, the creation of economic or political blocs to “further development” is not new. Before the Pacific Alliance, nations formed UNASUR, ALBA, MERCOSUR, Caricom, CELAC, the Andean Community and many others. The results of these unions both in the political and economic realms have been largely the same: Nothing.

When asked about the impact of MERCOSUR in their purchases of raw materials or sales of finished products, companies in Latin America privately say that the MERCOSUR is just a window dressing initiative that has done little or nothing to improve commerce among its members. In fact, as we speak, both Brazil and Argentina are engaged in a trade war that threatens to bring down important business deals between commercial partners in both countries. Argentina adopted a strong protectionist policy while Brazil refuses to allow the flow of Argentinian goods to its importers.

The leaders of countries like Bolivia, Venezuela and Ecuador have failed miserably to bring development to their people. They arrived to power promising better living conditions to supporters to only turn into tyrants with socialist leaning ideas. Despite this record, the members of the Pacific Alliance seem to believe that a new group of countries supported by China, will bring about the riches and improved living conditions that past presidents and community leaders failed to provide. All members of the Alliance intend to attract even more Chinese aid to their countries, trying to emulate Brazil’s efforts to open the door to the communist regime. Their official statements allege that they seek to expand trade with Asia.

By bringing China into the equation, the Pacific Alliance seeks to attract other business partners from the region, but only those who can show historical compromise with free trade and economic development. Under this premise, other smaller nations such as Costa Rica and Panama are attempting to jump on the bandwagon. Ironically, both Costa Rica and Panama have been American allies in the war on drugs and have implemented policies designed to slowly and quietly crack down on citizens’ rights.

For example, Costa Rica permitted the arrival of US military men into its territory under the excuse that it would help fight the war on drugs. As if that wasn’t enough of a violation to the country’s sovereignty, the US has now been allowed to set up a naval base in the Atlantic coast. During the early years of the construction of the Panama Canal, this country basically surrendered its sovereignty to the Americans, who later yielded possession of the Canal to China in 2000. This is one of the biggest concerns that critics have expressed about the newest integration. Some of these nations have associated with communist, statist or marxist groups in the past, but now fashion themselves as sponsors of free markets, free trade and social justice.

The official announcement of the Pacific Alliance was made just days ago by Chilean president Sebastián Piñera, who got all poetic about the new bloc. “From the heights of Paranal, in the most arid desert in the world and under the clearest of skies, we have signed a pact officially giving birth to the Pacific Alliance,” he said. “There are no incompatibilities or exclusion vis-a-vis other integration efforts. We are against nobody but rather in favor of even greater integration.” Meanwhile, his new partner, Mexican president Felipe Calderon said that “The Pacific Alliance’s economic potential is significant.” His counterpart from Colombia echoed the same kind of prospects for the new association by adding that the Pacific Alliance is the “most important integration process in Latin America.”

Although the existence of completely opposing groups was not cited as a reason to form the Pacific Alliance, behind the scenes governments like the Chilean and the Colombian have shown their concern about the creation of secretive partnerships like the São Paulo Forum, an organization composed by followers of Fidel Castro, Hugo Chavez and Luiz Inacio Da Silva, one of the founders of the group. These leaders subscribe to ideologies also shared by Ecuador, Nicaragua, and Argentina, although these last three nations do not express their adherence publicly. The lack of public recognition however, hasn’t prevented the citizenry of those countries from suffering from poverty, crime, insecurity and abusive, repressive governments, which are exactly what their leaders promised to eradicate. The São Paulo Forum is also linked to narco-traffickers and armed Marxist revolutionaries, of the likes of the Nicaraguan Sandinistas as well as the Russian and the Chinese governments.

The above mentioned scenarios are the ones critics of these alliances often warn against. The integration of countries that agree to surrender their independence without previously consulting their citizens in order to open the door to fascist, socialist or communist ideologues, who supposedly have the best of intentions in mind has been the common result of previous attempts to create strategic commercial and political groups. It happened in Europe, Asia, North America and definitely in Latin America. Most if not all of the unions assembled in the name of development and progress were just shams hidden behind charismatic men and women who preached the gospel that the people wanted to hear.

While military agreements have served the interests of those who traffic arms in exchange for cash or drugs, commercial accords rendered many nations poorer and more dependent on powerful corporate interests. The question that must be asked is why do political leaders continue to surrender sovereignty in order to have trade when they are not mutually exclusive? In fact, the world was never a more stable place, economically and financially, than when countries traded in a bilateral and multilateral ways, without surrendering the ownership of their resources and laws to unelected technocrats who are now in total control of everyone’s destiny.

Latin American Countries want Cuba free of Sanctions

By ANDREW CAWTHORNE | REUTERS | APRIL 16, 2012

Unprecedented Latin American opposition to U.S. sanctions on Cuba left President Barack Obama isolated at a summit on Sunday and illustrated Washington’s declining influence in a region being aggressively courted by China.

Unlike the rock-star status he enjoyed at the 2009 Summit of the Americas after taking office, Obama has had a bruising time at the two-day meeting in Colombia of some 30 heads of state.

Sixteen U.S. security personnel were caught in an embarrassing prostitution scandal before Obama arrived, Brazil and others have bashed Obama over U.S. monetary policy and he has been on the defensive over Cuba and calls to legalize drugs.

Due to the hostile U.S. and Canadian line on communist-run Cuba, the heads of state failed to produce a final declaration as the summit fizzled out on Sunday afternoon.

“There was no declaration because there was no consensus,” said Colombian President Juan Manuel Santos. He bristled at suggestions the summit had been a failure, however, saying the exchange of different views was a sign of democratic health.

For the first time, conservative-led U.S. allies like Mexico and Colombia are throwing their weight behind the traditional demand of leftist governments that Cuba be invited to the next Summit of the Americas.

Cuba was kicked out of the Organization of American States (OAS) a few years after Fidel Castro’s 1959 revolution and has been kept out of its summits due mainly to U.S. opposition.

But Latin American leaders are increasingly militant in opposing both Cuba’s exclusion and the 50-year-old U.S. trade embargo on the Caribbean island.

“The isolation, the embargo, the indifference, looking the other way, have been ineffective,” Santos said. “I hope Cuba is at the next summit in three years.”

Santos, a major U.S. ally in the region who has relied on Washington for financial and military help to fight guerrillas and drug traffickers, has become vocal about Cuba’s inclusion even though he also advocates for democratic reform by Havana.

CLINTON PARTIES IN “CAFE HAVANA”

In an ironic twist to the debate, U.S. Secretary of State Hillary Clinton went dancing in the early hours of Sunday at a Cartagena bar called Cafe Havana, where Cuban music is played.

Argentine President Cristina Fernandez, who has insisted without success that Washington recognize its claim to the Falkland Islands controlled by Britain, was one of several presidents who left the summit well before its official closure.

She missed a verbal gaffe by Obama, who referred to the “Maldives” instead of the “Malvinas” when using the name Latin Americans give to the disputed islands.

The leftist ALBA bloc of nations – including Venezuela, Ecuador, Bolivia, Nicaragua and some Caribbean nations – said they will not attend future summits without Cuba’s presence.

“It’s not a favor anyone would be doing to Cuba. It’s a right they’ve had taken away from them,” Nicaraguan President Daniel Ortega said from Managua.

Although there were widespread hopes for a rapprochement with Cuba under Obama when he took office, Washington has done little beyond ease some travel restrictions. It insists Cuba must first make changes, including the release of political prisoners.

Obama told a news conference after the summit he was “puzzled” that nations that had themselves emerged from authoritarian rule would overlook that in Cuba.

“I and the American people will welcome a time when the Cuban people have the freedom to live their lives, choose their leaders and fully participate in this global economy and international institutions. We haven’t gotten there yet,” he said.

Obama urged Cuba to look at political and economic transformations in Colombia, Brazil and Chile for inspiration.

PROSTITUTION SCANDAL

The prostitution saga was a big embarrassment for Obama and a blow to the prestige of his Secret Service, the agency that provides security for U.S. presidents. It was the talk of the town in the historic Caribbean coastal city of Cartagena.

Eleven Secret Service agents were sent home and five military servicemen grounded after trying to take prostitutes back to their hotel the day before Obama arrived.

Obama said in general his security personnel did an extraordinary job under stressful circumstances but he would be annoyed if the allegations were proven by an investigation.

“We represent the people of the United States and when we travel to another country I expect them to observe the highest standards,” Obama said of the reports. “If it turns out that some of the allegations that have been made in the press are confirmed, then of course I will be angry.”

A local policeman told Reuters the affair came to a head when hotel staff tried to register a prostitute at the front desk but agents refused and waved their ID cards.

Locals were unimpressed and upset at the negative headlines.

“Someone who’s charged with looking after the security of the most important president in the world cannot commit the mistake of getting mixed up with a prostitute,” said Cartagena tourist guide Rodolfo Galvis, 60.

“This has damaged the image of the Secret Service, not Colombia.”

The divisive end to the summit added to strain on the U.S.-dominated system of hemispheric diplomacy that was built around the OAS but is struggling to adapt to changes in the region.

“I’m not sure the next summit will even be possible,” said Carlos Gaviria, a Colombian politician and former presidential candidate.

Perceived U.S. neglect of Latin America has allowed China to move strongly into the region and become the leading trade partner of Brazil and various other nations.

Regional economic powerhouse Brazil has led criticism at the summit of U.S. and other rich nations’ expansionist monetary policy that is sending a flood of funds into developing nations, forcing up local currencies and hurting competitiveness.

Brazilian President Dilma Rousseff called it a “monetary tsunami” that Latin American nations had the right to defend themselves from.

Cheering the mood a bit, U.S. Trade Representative Ron Kirk announced that a U.S.-Colombia free trade agreement will come into force in the middle of May.

With a presidential election looming, Obama had portrayed his visit to the summit as a way to generate jobs at home by boosting trade with Latin America.

BRICS Denounce Currency Manipulation

By LUIS R. MIRANDA | THE REAL AGENDA | MARCH 29, 2012

In the power shift the world is experiencing today, both the rich nations and the supposed emerging economies are making sure they appear as cohesive groups with common goals. While the Anglo-Saxon bloc has governed over the world for well over a century, the emerging new powers in the underdeveloped regions of the planet are betting on public unity to exercise pressure over the current rulers.

While the dominant European nations and the United States hide behind bailouts to avoid facing the debacle of the banker-sponsored debt crisis, the BRICS want to show the world that there is another way to do things that may be more beneficial for all. Although the birth of the BRICS, a group composed by China, Brazil, Russia, South Africa and India seemed to be a good initiative to bring about economic and perhaps even political balance in the power struggle now occurring, the truth is that the BRICS are an example of what the Anglo-Saxon Empire was 200 years ago: A bunch of wannabe leaders who cannot find significant common ground to create and exercise policies that improve their people’s standard of living, but who do take time to show off their newly acquired insignificant medals.

It is easy to see why the BRICS are simply more of the same. In the latest communique issued by the group, it member countries criticize the United States and Europe for their manipulation of the Dollar and the Euro currencies. This criticism is well founded, but aren’t China and Brazil doing the same thing? They are. China artificially manipulates its currency to keep its value low and with that benefit by keeping the cost of exporting its goods low. Brazil on the other hand, also resorts to currency manipulation to keep the Real at about 1.75 Reais per dollar. Recently, business leaders in Brazil have been lobbying the government led by Dilma Rousseff to further devalue the Real in order for them to be more competitive in the international market. The idea according to these business leaders, is to take the Real to at least 1.85 per dollar, which would allow them to reduce the cost of exporting their products to the European and American markets as well as not having to pay better wages to its workers. In other words, the Brazilian industry is asking the government to tax its people by devaluing the Real, which will increase inflation.

In a previous statement, some members of the BRICS talked about their reservations to denounce currency manipulation because China, one of the most influential members of the group, also engages in such behavior. It was only after China learned about the position of the other member-states and understood that the official communique was meant to criticize Europe and the United States that the document was made public. “Brazil will push for its large emerging-market peers including China to denounce what it sees as unfair monetary policies by Europe and the United States, raising the stakes in a global confrontation over economic imbalances,” reported Reuters on Wednesday. On Thursday, representatives of some of the most influential multinational corporations that operate in Brazil, met with the Secretary of Commerce in the capital city of Brasilia, Brazil to request that the government manipulated the Real in order for those companies to gain an advantage on foreign competitors and international markets.

According to Reuters, Brazil accuses rich nations of using policies to cause a “monetary tsunami” by adopting policies that spread benefits such as low interest rates and bond-buying programs. These policies, according to the report, were designed to stimulate the troubled U.S. and European economies. This is the official explanation, however, the real goal is to cause a massive debt hole from which the global economy cannot come out of. Banking leaders in Europe and the United States are letting the debt crisis collapse in a progressive and incremental way to a point where the artificially created liquidity will not be able to bail nations out. So-called emerging markets like Brazil, are directly or indirectly absorbing the new monies being put out by the banks and large investors — in many cases as loans or investments in infrastructure — in order to hook developing countries into deeper debt and terminate them once their power grab process is completed. This is not reported in the local media or talked about by mainline economists, who believe that the investment is coming in as a result of some magical attraction that the country has, or perhaps because Brazil is governed by a woman, or because the people here are friendly. The few economists who do know about the real intentions the bankers and large investors have in mind do not have the guts to talk about it.

Publicly, the BRICS seem to be led by Brazil, whose Trade and Industry Minister, Fernando Pimentel, believes that although their complaints about currency manipulation and other protectionist policies will not convince powerful countries to stop such policies, it will somehow allow them adopt other protectionist policies they’ve previously denounced including raising tariffs and implement changes in trade and commercial policies at supranational unelected bodies like the World Trade Organization.

A few years ago, when Brazil magically became the target of massive investment no one in this country complained about it, or about currency manipulation or protectionism of any kind. But after the country began to feel the effects of the current global depression, apologists started talk about the external reasons why the country’s economy was tanking. Although Brazil has overtaken the UK as the world’s 6th largest economy, internally the results of such achievement are nowhere to be seen here in Brazil. In fact, Brazilian companies as well as international corporations that operate here are not even close to embracing open markets and free trade — not even among themselves. Instead, they are envisioning future protectionist measures to save themselves from decision made by Europe and the United States. Brazil and Argentina are carrying out a trade war that limits the free flow of products and services. Companies are having to trade smaller amounts of goods in order to get paid smaller amounts of money so that the central banks do not hold payments due to the large volume of the transactions.

“Brazil has blamed the global liquidity glut for making its currency one of the world’s most overvalued. As local industries struggle, its economy grew only 2.7 percent in 2011, below its BRICS peers and down from a blistering 7.5 percent in 2010,” reports Reuters. Meanwhile, Brazilian officials do not recognize that it is their incapacity to govern which caused their industry’s growth to slow down. The country suffers with one of the largest schemes of corruption in the world which results in inefficient production, skyrocketing taxes,  and poor infrastructure which makes Brazil one of the most difficult and expensive places to do do business.

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