Sunday, April 18, 2010

BRICs Continue Local Currency Pursuit

A growing number of nations are losing confidence in the U.S. dollar, as the endless printing of paper money has increased the pace of the drop in value of the dollar, and its desirability as a currency to do business in, as it's becoming questionable as to its long-term viability on a number of fronts; including whether countries want to continue to acquire the increasingly risky Treasuries, which have propped up the U.S. economy for a long time.

Although it's not the first time BRIC countries have let it be known they are looking for ways to conduct business in their own currencies, the fact that they're continuing to talk and pursue it shows it's not an issue that is going away, and also points to the probable removal of the U.S. dollar in the future as the currency to be traded in, to be replaced by the renminbi or yuan.

China already allows some business to be conducted on a regional basis in its own currency, and that is an experiment to see the potential of expanding to do business in foreign currencies besides the U.S. dollar.

The other thing on the positive side, is it seems to show not only a desire to do business beyond the U.S. dollar, but also that the countries are increasingly confident in the currencies of each country.

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