Tweet

BRIC Countries: Unified in their Hatred of the Dollar

Written by: Sean Hyman

Article Overview: The BRIC ETF (EEB) and the US dollar have an inverse relationship; that is when the dollar is going down, the BRIC ETF is going up and vice versa. So it makes sense that some of the BRIC countries would like us to have a weak dollar. But yet we always hear that China is concerned about our weak dollar? What gives? What do they want from the dollar?

BRIC Countries: Unified in their Hatred of the Dollar

• Currency Investing

When Goldman Sachs coined the term "BRIC" (Brazil, Russia, India, China) for the fastest-growing developing economies in the world in 2001, I highly doubt that they thought that within 10 years these countries would actually take their advice and form a coalition.And yet here we are.The first BRIC summit occurred this week and went largely unnoticed. More of a symbolic meeting than anything else, the one topic on everyone's mind was what to do about the US dollar?

Why was the meeting symbolic?Because the BRIC economies have absolutely nothing in common!The only common factor they have is that they hate having the US dollar as the world's reserve currency.Let's face it, these countries speak 4 different languages and are on 3 different continents bordered by 3 different oceans.One country is communist, another formerly was, and the others are republics.

Half of BRIC are commodity producers (Brussia) and the other half are end users (Chindia).With this in mind, one would think they would have different reactions to the strength of the US Dollar.But surprisingly they all seem to be on the same page.

The BRIC ETF (EEB) and the US dollar have an inverse relationship; that is when the dollar is going down, the BRIC ETF is going up and vice versa.So it makes sense that some of the BRIC countries would like us to have a weak dollar.But yet we always hear that China is concerned about our weak dollar?What gives?What do they want from the dollar?

The short answer is that they don't know. Brussia benefits the most when the dollar is weak as this tends to be inflationary which results in higher commodity prices.Chindia would rather see a strong dollar, so that the US will consume more of their goods, their energy costs will be less, and they'll get more interest on their dollar reserves.

So what did they hope to accomplish at their first summit?Basically it was a wake-up call to the US and the rest of the world that these economies want to be players and taken seriously.After all, it wasn't that long ago the China was accused of unfair trade practices and criticized for keeping its currency pegged, Russia was privatizing companies and blowing out foreign investor holdings, and Brazil was defaulting on their debt!

And they claim the problem is having the US dollar as the world's reserve currency! They wouldn't even be having this summit if it weren't for a guy sitting in an office at 85 Broad St!

So as we can see, the BRIC countries are nothing more than a collection of developing economies looking for a bigger place on the world stage.But rather than all of the negative talk about the US, they should be thankful that their past sins have been forgiven and that they've been encouraged to grow and become prosperous.

After all it could be worse.Emerging economies South Korea, Hong Kong, Indonesia, and Thailand could have been added to the existing Brazil, Russia, India, China.I'll let you figure out what that acronym is!

Related Articles
  The Near-term Future of Global Travel
  Seamless Integrated Communication
  Coping with Biases
  The Unified Tribe-A Good Way to Jump Start Your Business
  Investing Trick of the Pros: As goes Oil, So goes the Euro!

Article Tags: bric countries, bric etf, commodity prices, commodity producers, common factor, continents, developing economies, different languages, eeb, energy costs, goldman sachs, india china, inverse relationship, page nbsp, republics, reserve currency, short answer, strong dollar, ul type, weak dollar



Related Forum Posts
Re: How does an entrepreneur stay energized? - Hi there, This subject is not only for entrepreneurs. Everybody can benefit from this, that is the reason why 'Healthy Living and Eating' is a multi billion Dollar business. Often I smile, because so much is written about it. So many different business are blooming and doing well. Whilst there is so much knowledge and opportunity to be healthy and well, the need is still growing. There is so much that could be said. The cheapest form of energy is gained by a good sleep.
Re: Best Internet Marketing Strategy - I wanted to share more on the topic of Blogging and creating your own original content that you enjoy writing about. Here's a real example. My wife started her own little Web site a few years ago. It's a very simple, home made Web site she built all on her own. She had sort of a hobby of going into Dollar stores, purchasing a few inexpensive items for a buck or two. Then she would create something completely new (usually home decor) out of what she bought (often with the same value of creating something that was worth up to $15 or $20) if you bought it in other stores, but only using material she bought at a dollar store. So on this little Web site, she starts writing about her creations and take pictures of them etc. A few years ago, someone from an AOL Money and Finance Blog (called Wallet Pop) invited her to Blog for AOL. Today, she write for both the US AOL Blog and the Canadian AOL Blog as well as she continues with her hobby and keeping up her own Web site. The other Bloggers at AOL have nick-named her, "The Dollar Store Diva" and she often writes about budget decorating. What amazes me is that with no SEO and just her original content, she attracts huge volumes of traffic. She has done radio shows in Toronto (and nearly went to the US to do breakfast television) and most people would be so amazed to see the traffic spike she gets from Blogging. But once again, she is just writing about the stuff she loves to write about. She is having fun with creativity and she now has a huge following of readers and subscribers.Others are decorating their homes with her ideas and their doing it with next to no budget. If someone is creating a Web site or a Blog, the best thing you can do is try something original on your own, but make it something that you love to write about.
Please help me before I give up!!! - Hey everyone, I am not really new to the idea of Affiliate Marketing but I have yet to make 1 Dollar. My latest venture involved registering a domain name and redirecting the domain name to my affiliate link. advertising of course, is my biggest problem. I have advertised all over the web. Some free, some paid for. I am seriously thinking of rolling the dice and spending a heap of money on a radio commercial or full page ad in a newspaper or magazine. Anyone think that’s a good Idea?? Or got any new ideas for a clickbank wannabe like myself?? ...Thanks!
$1,000,000 - Hi Evan, Are you talking about US Dollars? If so, that would be approx £500,000 in the UK. The Canadian Dollars differs also from the Australian Dollar. In any case, one needs to solve problems to help people to get money. The more solutions are given to people's needs to solve their problems, the closer one gets. Finally, are we talking about 'Income' or can we talk about 'Asset'? Kindest Regards Beat "Unlock People's Potentials!"
Top 50 Entrepreneurs Ever! - And the Top 50 Entrepreneurs of all time are… (In no particular order) Hugh Hefner – Obvious. Oprah – Born to a single mother in rural Mississippi, did what she loved and never let up. Popularized and revolutionized the tabloid talk show genre. Simon Cowell – Guy made millions off Karaoke. Jenna Jameson – Worth $70 million using only what god gave her. Henry Ford – Standardized efficiency. Thomas Edison – Numerous failures on the road to success. Perseverance! Adrian Block - 1612 establish the first known brewery in the New World on the southern tip of New Amsterdam (Manhattan). I live in a city with more than 30 breweries operating in the city limits…think these guys were onto something. Hans Christiansen – Partners with Adrian Block. Adam Osborne – Creator of the 1st personal computer. Howard Hughes – Say what you want about him the man had a vision and stuck to it. Madame C.J. Walker – 1st Female African American Millionaire…and she did it in early 1900’s. Safe to say she had a lot of obstacles, but persevered and prospered. If you think you have more working against you than Madame C.J. Walker did, think again. Mary Kay Ash – The woman behind Mary Kay cosmetics. Redefined affiliate marketing. Howard Schultz – Who’s gonna’ pay $4.00 for a cup of coffee? With $2.5 billion plus in total revenue the answer at Starbuck’s is a lot! Alexander Graham Bell – Inventing the telephone in 1876 was about as wacky an idea as teleportation is today…did that stop him? King Croesus – Minted the world’s first coin in 6th century. Benjamin Franklin – Author, printer, inventor, businessman. Ray Croc – Where do you go for dinner when you spent all your money on $4.00 Starbuck’s coffee? McDonald’s! Franchising and national expansion (both stores and waistlines) would never be the same. Sam Walton – Speaking of saving money and expanding like crazy. Sam Walton found a niche and filled it, regardless of what you think of the extra traffic Wal-Mart brings to your neighborhood. Ernest Gallo – Took what was once an exclusive product and repackaged it for the masses. I was 20 years old before I knew wine came in anything but a “jug”. William Middlebrook – Giving William the nod for inventing the paper clip, although some debate remains. However, you have to include the inventor of the paper clip in this list since we’ve all said, at one time or another, “and whoever invented the paperclip is rich, and I’m still working in this crappy office!” Bill Gates – Took a risk and was a first mover in a market that exploded. Steve Jobs – Make your products easy and people will love to use them…making a dead sexy laptop doesn’t hurt either. Mayer Amschel Rothschild – Started the world’s first international bank in the mid 1700’s. What did you do today? Scrooge McDuck - Scrooge has emerged from being a mere supporting character to a major figure of the Duck universe. Parlayed early success into his own comic book series, television appearances, films, and video games. As big as David Hasselhoff in Europe, he seized opportunity when it arose. Russell Simmons – Worth $325 million, and started as a teen street hustler. A hip hop pioneer and visionary who has shaped the hip-hop scene of the early 80’s, has branched off into fashion, television and film. And I don’t care if you grew up in Brooklyn or Beverly Hills you remember “Russell Simmons Def Comedy Jam”. Ron Popeil – Net worth in excess of $100 million dollars. A consummate salesman, he had us believing we NEEDED a food dehydrator and spray paint to cover our bald spot! The Phoenicians – Inventors of the sail boat, and could be credited then with giving our early explorers the means to take over the western hemisphere. H. Ross Perot – Used a $1,000 loan from his wife in 1962 to start Electronic Data Systems. Became a billionaire as computer systems drove the need for electronic data storage. JP Morgan – How many people get credited with having saved or rescued the U.S. national economy in general—and the federal government in particular—on two separate occasions? Not many, and JP was a merger monger legend in his time. Charles Schwab – Founder and CEO of the Schwab Corporation, made having a broker cool and accessible. Worth $5.5 billion for his efforts. Larry Page – Google, need we say more? Sergey Brin - Google, need we say more? Philip Knight – In partnership with Bill Bowerman created Nike. What’s the reward for taking a product everyone uses and making it functional and fashionable? Try a net worth in excess of $9 billion dollars. George Lucas – Start with a vision, add some talent, and never waiver. Stars Wars is as well known on this planet as Coca-Cola, and Lucas is worth a cool $3.6 billion. Doctor John Pemberton – Pharmacist who in 1886 invented Coca Cola. Forced to change his formula from including wine due to prohibition his elixir with “tonic and nerve stimulant properties of the coca plant and cola nuts sweetened with sugar” became a sensation. Eberhand Anheuser- Founder of Anheuser Busch Brewing and Budweiser beer…thank you sir for the many mornings where I regretted the night before. Adolphus Busch - Founder of Anheuser Busch Brewing and Budweiser beer…bless you for allowing me to think I am funny, great looking, and a fabulous dancer for a few hours every Saturday night. Jeff Bezos – Founded Amazon.com in 1994, and wrote up the business plan for his company on a cross country drive from New York to Seattle. Was a .com entrepreneur before there was even a term for it. Thomas Kinkade - Americas most collected living artist. Marketing works people. Erno Rubik - Invented a puzzle only .000001% of the world population could solve without cheating, and sold millions! Marketing works people. Alex Tew - 21 year old entrepreneur made $1,000,000 off the “Million Dollar Homepage”. Adding him to the list to illustrate that great ideas are sometimes in plain sight. Didn’t we all think, “I wish I had thought of that”? Henry Hassenfeld - Owner of a textile plant in 1923 his company struck gold when they developed a way for kids to play doctor. The first toy the plant ever produced led the way for the likes of Mr Potato Head, GI Joe, Life, Yatzee, Candyland, and just about any other game we played as kids. Partners with his brother Helal Hassenfeld. Helal Hassenfeld - Thanks for the memories man, I still get misty eyed thinking about Cobra Comander and the words “YO Joe” will live with me forever. Rollin King - In 1965 started a regional airline serving 3 Texas cities. 40 years later Southwest Airlines has 3500 flights a day and is the number one airline in the United States and the World by number of passengers carried. Herb Kelleher - Partnered with Rollin King to start Southwest Airlines. The guy started an AIRLINE COMPANY for crying out loud, that’s ballsy. Guy Laliberte - Made the circus cool again. Founder and CEO of Canda’s Cirque du Soleil, Laliberte founded Cirque in 1984, and revolutionized the idea of what a circus could be. Cirque du Soleil has toured more than 100 cities around the world. Admiral Zheng He - Built the vaunted Treasure Fleets, comprising dozens of ships and tens of thousands of sailors, and led them in trade missions across south Asia and as far west as Africa and the Strait of Hormuz in the Persian Gulf. In seven voyages from 1405 to 1433, Zheng He spread China’s goods across the world and returned with treasures for the Ming Dynasty. Andrew Carnegie - The Scottish immigrant and weaver’s son built a steel empire whose mills churned out the railroads, ships, and structures of post-Civil War America. Milton Hershey - In 1905 built the worlds largest chocolate factory. His name has become synonymous with chocolate, which Americans consume more than 11 pounds of each year. Gary Dahl - A millionaire for selling rocks, pet rocks, enough said.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

12 Principles to Spark Innovation

Getting The Media Attention You Deserve

Are You Fulfilled

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.