It is already apparent that the primary purpose behind the construction of the Asian Infrastructure Investment Bank (AIIB), and the newly minted BRICS bank, is to prepare the world for de-dollarization, and the end of the U.S. led reserve currency. And on July 24, the President of the BRICS bank announced that their facility would begin instituting loans to developing nations starting in April of 2016, and that these loans would be denominated in Chinese Yuan, rather than the dollar standard which has lasted for more than 70 years.
The significance of this announcement only lends strength to several other events that have taken place in July that point towards the rise of the Yuan as a new de-facto reserve currency, and the foundation for not only the BRICS bank, but the Shanghai Cooperation Organization (SCO), the Eurasian Economic Union (EEU), the AIIB, and of course, the massive project known as Silk Road 2.0, or the Belt and Road initiative.
The BRICS New Development Bank will name its first investment in April next year and the first loan will be issued in yuan not dollar, top officials confirmed.
The first president of the Bank, Kundapur Vaman Kamath said in Shanghai that the new lender will work closely with the China-led Asian Infrastructure Investment Bank.
“We have partnerships that we will forge with the AIIB, the national loan banks and indeed, the exiting market loan banks,” he said.
The NDB with about $50 billion in capital to invest in public infrastructure will compete with institutions where the US has considerably more influence—organizations such as the World Bank and the International Monetary Fund.
Kamath, who has been nominated by India to head the bank, also said the first investment will be made in the Chinese currency. This would aid China’s attempts to diminish the dollar’s dominance in global trade and finance. China is also pushing for the International Monetary Fund to endorse the Chinese yuan as a global reserve currency alongside the dollar and euro. – BRICS Post
However, there is another purpose for the BRICS Bank, and one that has been touched upon by statistical analyst Dr. Jim Willie in recent months. As opposed to the AIIB, which has 57 charter members from countries all around the world, the BRICS Bank is to be run primarily by the five members in the Eurasian coalition, and will be the catalyst for a new gold trade standard that will be managed from this institution.
The month of July has seen several financial revelations occur that point towards the world dumping dollars and preparing for a new gold standard in either trade or currencies. Besides the fact that China has sold off over $500 billion in U.S. t-bills over the past five quarters, and physical gold supplies around the world are nearing critical shortages as we enter into the peak season of gold buying in India and China, the financial world is waiting for the time when the Shanghai Gold Exchange (SGE) announces a new price discovery mechanism that will not only compete with London and the Comex, but assuredly re-price the monetary metal much higher than the paper spot price that has dominated the markets for years. And once that new value for gold is implemented, and allowed to float freely in the markets, the time for trade settlement in either gold or Yuan will mark the end of U.S. dollar hegemony over the global monetary system, and usher in a new age of growth outside of the longstanding debt based system the world has followed since Bretton Woods.