Studies to Eliminate Dollar in Brazil-China Trade Going Slow

China and Brazil have created a work group to study the possibility of implementation of a bilateral trade program in their respective currencies, in replacement of the North American dollar, said a source in the Central Bank of Brazil.

"The negotiations are still in an initial phase, with a work group having been created with representatives of Brazil and China, who also met during the G-20 summit, in London," explained a source.

The next step should be the visit of a Central Bank of Brazil delegation to China, "despite there being no forecast as to when it may come true," said the source.

The work group should analyze the "results to be reached through an agreement that China recently established with Argentina" - the first country in South America to benefit from trade exchanges in the same currency with the Asian giant and with whom Brazil has also been developing the same program since September 2008.

The Central Banks of China and Brazil are also going to develop a "study of the potential bilateral trade volume to analyze the possibility of an agreement."

Click here to read the full article

Written by Newsroom
Wednesday, 16 September 2009
[Source] - brazzilmag.com

Jim Rogers Investment strategy in time of crisis CNBC

Words of wisdom, as usual, from my man Jim Rogers.



"Protectionism is getting worse and worse. I'm terribly worried about because protectionism lead to the Great Depression... I'm worried about a lot of things. A 50% rise in 6-9 months is something to worry about. You usually have corrections after that.

China's gold reserves growing, and fast... What does it mean?

China's gold reserves have nearly doubled over the past five years, according to the country's foreign exchange administration.

At the moment China holds about 1000 tons of gold, up from 600 tons in 2003 according to Hu Xiaolian who is head of the State Administration of Foreign Exchange (SAFE). Take note, the last time China released such information was in 2003, so this is not exactly a every day occurrence.

Definitely big news, especially for the United States which at the moment is the major beneficiary of China's massive foreign exchange reserves, most of which are held in U.S Dollar denominated assets.

“China still has only a very small percentage of its forex reserves held in gold, much less than the United States or other developed countries,” said Paul Atherley, Beijing-based managing director of Leyshon Resources. “Those holdings are still too low in terms of the size of its economy and the growing significance of its currency.”

At the moment, China's total gold reserves only account for roughly 1.6% of its entire accumulated FOREX reserves. The total value of its gold holdings are currently reported as $31 billion (211.6 billion yuan).

Furthermore, according to this FT article the move coincidentally comes as many European central banks are selling their gold and as the International Monetary Funds discusses selling a considerable portion of its own gold reserves.

“This is probably the most significant central bank announcement since the Central Bank of Russia announced at the LBMA gold conference in Johannesburg in 2005 that it wanted to hold 10 per cent of its foreign exchange reserves in gold,” said John Reade of UBS.

Check out this chart of how gold has performed over the past five years.


Gold has traditionally been viewed as a store of value and a safe heaven for wealth in volatile times, and these are indeed volatile times.

China recently hinted that it would like in a perfect world that the global economy adopt a single currency. The Political Satire, the Daily Show articulately described in last nights episode, this is just not going to happen (Note the link provided takes you to a video from last nights episode that contains some questionable language).

In reality it is hard to believe China legitimately thinks the United States would consider adopting a single currency. What China was really aiming to do was send a message that the United States better make sure that it not only pays back all the money China has lent it over the years but that it also pays it back at a premium.

If inflation goes through the roof because of low interest rates and the massive amounts of money the United States is printing, China is going to be paid back in a very devalued currency, and this will make for a very unhappy China.

Recent headlines relating to China's planned gold purchases sends yet another clear message to the United States.

"Make sure you get your house in order!"

China's FOREX reserves have grown from $623 billion at the start of 2005 to a whoppin' $1.906 trillion at the end of September of 2008. Growth however did slow tremendously in the first quarter of 2009, growing a mere $7.7 billion.

With its current stock of 1000 tons of gold, China has the fifth largest holdings of gold in the world. Hou Huimin, vice general secretary of the China Gold Association suggested in his opinion China should build it reserves to 5,000 tons.

One thing is clear, China is going to be very careful where its stores it wealth in the coming years.

Marc Faber says he grows "good stuff," which makes you very happy ... HAHA

One of my favorite investment guru's, made a appearance on Asia Confidential, hosted by one of my favorite live commentator's from Bloomberg's Asia Crew, Bernie Lo.

Basically echoing a long term trend, described by other investors around the world. Faber explains in a casual manner how power is slowly shifts towards those who produce actual consumables like food, versus derivatives traders.

Marc Faber asked about investing in farmland said that they have a farmland in New Zealand and there they don't grow hashish but in northern Thailand "they" (people?) grow good stuff.

Marc Faber says stocks may develop rally 'relatively soon' Feb 23. -- Bloomberg

Metals Outlook: Will Gold Return to $1000? -- Bloomberg

Investors Flock to Gold - Analysis and Discussion with GFMS CEO Paul Walker

Jim Rogers comments on commodities (Bloomberg LP)... Amazing how this guy alone can cause the market to move

Jim Rogers on Bloomberg 2008.07.14