MercoPress. South Atlantic News Agency
With an eye on Argentina and Venezuela, Brazil private sector wants Mercosur trade in local currencies
Brazil's private sector concerned with harsh times ahead, particularly with exports to Argentina and Venezuela are proposing that Mercosur trade should be done with local currencies leaving aside the US dollar. The initiative was launched by the president of the Brazil-Argentina Commerce Chamber. Read full article
Comments
Disclaimer & comment rulesNot even Venezuelans and Argentineans want to use their own currencies. The Brazil-Argentina Commerce Chamber is deluded.
Mar 07th, 2014 - 09:17 am - Link - Report abuse 0Good idea because 1) this may promote their trades, and 2)if you use local currencies, you save fees to pay the US imperalism, which are substancial savings. Now even Japan use local currencies in trade between Japan,China, and other countries as much as possible., and 3) US is a declining power with unsustainable debt to China and Japan. Now US dollar is still a fiat currency dominating the world, and so make it weaker and weaker.
Mar 07th, 2014 - 10:20 am - Link - Report abuse 0There is already an agreement in Mercosur for the use of local currency. We're just going to encourage the use of 100% of trade.
Mar 07th, 2014 - 11:01 am - Link - Report abuse 0This is the path of independence.
None of those countries have stable currencies. What happens when one of them devalues again?
Mar 07th, 2014 - 11:16 am - Link - Report abuse 0and they will
The exporter will get screwed.
That's why nobody does this.
The dollar does not offer any security. Every day brings new economic policies in the U.S..
Mar 07th, 2014 - 01:03 pm - Link - Report abuse 0And a large unpayable debt.
5. You are too stupid to go into a long reply so please answer one of both;
Mar 07th, 2014 - 01:11 pm - Link - Report abuse 0How do you sell in any of the 3 currencies when 2/3 of them are devaluing by at least half this year and possible much more.
or
Which rate do you use Gov't rate or Street rate?
The stupidity of Brasileiro is mindboggling. The US$ is a medium to trade and reasonably secure. If the world's number one economy falls all economies will fall, its economic fortune has so much influence, so it's unlikely the dollar value will devalue hugely in a short period. I think direct trade in other currency swaps is good. But who in the hell is going to trust a trade in the currencies of Argentina and Venezuela. Most South American wealth resides in banks well outside the region and you can understand why, they don't trust their own currencies to maintain value!
Mar 07th, 2014 - 04:26 pm - Link - Report abuse 0yup..more nations (Bric nations, australia with china, other asian nations are doing business with china and russia outside the dollar, trade between Saudi Arabia and China, Venezueala and China = all a threat to keep the US dollar as the worlds reserve currency status) are already doing business outside the US dollar (getting worthless anyway). Conclusion: status of the US dollar as the world reserve currency is in decline. Not just an opinion, it's a fact and it's unstoppable.
Mar 07th, 2014 - 04:28 pm - Link - Report abuse 0US will utterly collapse when the dollar is dumped. Circa 2030 it's all over for them.
Mar 07th, 2014 - 05:30 pm - Link - Report abuse 0”The Brazilian exporter sells in reales and the Argentine buyer pays with Pesos, this will automatically increase trade and reduce demand for dollars”.
Mar 07th, 2014 - 06:47 pm - Link - Report abuse 0While the principle of trading in your own currency sounds good, in this particular case, a lot of Brazilian exporters have already been screwed by their Argie clients, and they must be asking themselves if the Argies want to pay in pesos, at which rate is it to be ? the official rate, or the black market /street rate ?
@9 UNobservant Troll....for the USD to be dumped, there has to be a viable option to substitute it....which currency do you propose ? the Argie pesito ??
@7 I have to disagree. The stupidity of Brasileiro is NOT mindboggling. You have to think “jeitinho brasileiro”. The best way of translating it is on the lines of “fraudulent scam”. Consider how they do things in latam. Everything is altered to suit their purposes. They have something called “diplomatic asylum”. You can take that whichever way you like. The rest of the world has “political asylum” for which there are clearly defined and internationally-agreed criteria. But latam had to have something different. Specifically, something that allowed them two bites of the cherry.
Mar 07th, 2014 - 09:20 pm - Link - Report abuse 0Now suppose a Brazilian exporter includes in the contract the proviso that a price in Brazilian reals can be paid in argie pesos at the rate of 5 argie pesos to 1 Brazilian real. The argie importer argues but can't get a better exchange rate for goods he needs. So he pays. But now the Brazilian supplier is faced with a problem. The stack of argie pesos he has is worth nothing to him unless he can exchange it for Brazilian reals. Remember how Uruguay got upset a while ago because argieland wouldn't buy back its currency that Uruguay, in good faith, had exchanged for Uruguayan currency? How long will it be before the “mercosur” countries want to adopt this method in all international contracts? Leading to a total lack of trust in all international trade. One way or another, it'll be a scam. Perhaps someone else can see farther into this.
We could use a rule that does not offer convertibility risk.
Mar 07th, 2014 - 09:55 pm - Link - Report abuse 0Couple to GOLD and convert into local currency at the time of transaction.
Noble to me.....Please!
hahaha
https://www.youtube.com/watch?v=JULv_VlPwQ4&list=FLmXPTu1f8AdGlizWNiASx2A
Do exchanges accept national currencies?
Mar 07th, 2014 - 10:27 pm - Link - Report abuse 0Mmmhhh. Could cause problems I think.
Who needs them. duh!!!!!!!!!!!!!!!!!!!!!?????????????????????????????
6.3 to 1US$ is the vnzla gov rat
Mar 07th, 2014 - 10:47 pm - Link - Report abuse 0+80 to 1US$ is the street rate.
forget the numbers, look at the % disparity!
How the hell can you do business in these circumstances?
I know I can't and have currently suspended trading there.
The dollar fluctuates too much!
Mar 07th, 2014 - 10:48 pm - Link - Report abuse 0Never! fancy that!
Mar 07th, 2014 - 10:59 pm - Link - Report abuse 0Now that's not nice.
Make the right question ..... I do not understand you.
Mar 07th, 2014 - 11:44 pm - Link - Report abuse 0@17
Mar 08th, 2014 - 12:09 am - Link - Report abuse 0You want to trade coupled with gold?
Last time I checked it was valued by USD per ounce. . Which leaves your proposal swinging in the wind...
Gold remained stable from 2008 to today.
Mar 08th, 2014 - 12:16 am - Link - Report abuse 0The variation of the dollar among major currencies was 106.27%.
Yes and it's value is quoted internationally in dollars. So you still need the dollar price for comparison you halfwit.
Mar 08th, 2014 - 01:21 am - Link - Report abuse 0oh I can see why yankeeboy doesn't bother reply to you. ..
Learn more about the jaguar..
Mar 08th, 2014 - 01:24 am - Link - Report abuse 0hahaha
Namíbia is a good example.....South Africa too
And what are all these Brazilian businesses going to do with their new found mountains of pesos and bolivars?
Mar 08th, 2014 - 05:04 am - Link - Report abuse 0Because no one else wants them. Not even Argentineans and Venezuelans. When they trade with other countries they'll need euros, dollars or reais, but definitely not pesos or bolivars. The Chinese won't want them, the Europeans won't want them, nor Canadians, Americans, Russians or anyone in the Pacific Alliance.
So go ahead Brazil, kick an own goal and see how worthless those pesos and bolivars are when you can't get rid of them.
This could work but it will add to inflationary pressures as not all the Pesos or Bolivares etc would find their way back, they would have to be sucked up by the central bank which would print new money . I suppose the seller would have to invoice in his local currency, (Reais). Then the buyer would have to pay in Argentine Pesos by transferring the equivalent amount of money directly to the Brazilian bank, which in turn would pay the seller in freshly minted Reais which it got from the central bank. If the trading partners keep their currency at an agreed range for an extended period and the volume of trade is evenly balanced it should work. There is however the downside of an increase in the money supply and also the fact that desperately needed Dollars reserves for trade with other countries would rapidly decline. For this to really work others outside Mercosur would have to accept payment in these currencies .
Mar 08th, 2014 - 06:37 am - Link - Report abuse 0De aquel DOLAR, de compras de ligera... nada mas queda, nada mas queda, NADA MAS QUEDA!!
Mar 08th, 2014 - 07:38 am - Link - Report abuse 0Bye bye dollar nothing else remains. Nope, I just checked.
Nothing else remains. US dollar, finito... Finito with a capital O!
Oh no! yankebooy wake up
Why would you capitalise the last letter of finito?
Mar 08th, 2014 - 10:16 am - Link - Report abuse 0FinitO?!?!
Did all the US dollars suddenly disappear? Nope.... NopE!
24. How strange I used U$ all night drinking and dining. Didn't have one problem with anyone accepting it.
Mar 08th, 2014 - 02:22 pm - Link - Report abuse 0I do the same when I'm in your filthy country
and I get preferential treatment when I do
The mighty U$ will be around long after you, your kids, your grandkids and their kids are dead and rotting.
Don't worry your feeble mind about it.
I'm not
22
Mar 08th, 2014 - 05:46 pm - Link - Report abuse 0The will have to get the brazilian Central bank to give them Reales in return for the pesos and bolivares. They would use the same pesos and bolivars to pay back imports from Argentina and Brazil.
I guess the idea of this is to keep and mantain the level of economical activity, but its hard to see it work out without big loosers in the scheme of things..i.e the Brazilian central bank
It seems that even the bechmark currency, the US$, is variable via QE, etc.
Mar 08th, 2014 - 06:09 pm - Link - Report abuse 0I know the dollar rate of the Real varies (usually in the one direction),
and we all know that both Peso rates vary (consistently in the one direction),
so it seems that the acceptability of transactions, either in local currencies or US$-linked, are only possible at an agreed, defined short-term rate.
The problem seems to be the differential rates of inflation of the various currencies; and the longer the money is tied up in the trade flux the greater the problem.
[I may be wrong - I am no expert in these matters; quite the reverse!]
I seem to remember that this was a major problem with trying to do business with Zimbabwe during the hyper-inflation years. Zimbabwe only avoided total catastrophe by trading using the satanic US$!
@3 Brasileiro as usual, and at best is only minimally right, as he hasn't the faintest idea what he’s talking about. The fact is that the SML (in English= Local Currency Payment System ) was created in 2008 and is by no means in full swing. The fact is it is virtually stagnated. The main problem is the exchange rate used by banks to convert the Reais to Pesos. If the black market rates (true values) of both currencies were similar to their official rates, the problem would not be as big; In Brazil they are fairly close, but in Argentina….. The largest trade sector between Brazil and Argentina is the automotive industry, and it has, up to now, only traded in USD….Because, any shipper in their right mind, doesn’t want Pesos…And, of the few transactions that have been carried out in local currency, 99% refer to Brazilian exports to Argentina. In the other direction, the use of local currency is virtually non-existent . The largest problem with the Mercosur Block, is the lack of effective, and continual coordination of the macroeconomic policies of the first 4 members, and if you include VZ, the situation only gets worse.
Mar 08th, 2014 - 09:54 pm - Link - Report abuse 0@11 Conq, “”@7 I have to disagree. The stupidity of Brasileiro is NOT mindboggling. You have to think “jeitinho brasileiro”. The best way of translating it is on the lines of “fraudulent scam”…..Please allow ME to disagree : Brasileiro IS stupid…he’s not smart enough to think up a “jeitinho”, which by the way, can be translated just by ‘‘scam”, as by definition, a scam IS fraudulent .
@12 Brasileiro says “” We could use a rule that does not offer convertibility risk”….between Brazil and Argentina ?? well, the only problem is that such a rule still has to be invented.
@17&19, Brasileiro tries to sound smart, but in his #21 he loses it and goes back to being his normal, idiotic self.
@24 Troll Observer, you keep on saying the USD is “finito”, but don’t tell us which currency will replace it…bog roll ? C’mon genius !!
No bog roll in Venezuela. But petrol is virtually free (subsidised).
Mar 09th, 2014 - 12:08 am - Link - Report abuse 0Hmmm...
http://www.losandes.com.ar/includes/resize/620.asp?path=/fotografias/fotosnoticias/2014/3/8/589723.jpg
Mar 09th, 2014 - 04:53 am - Link - Report abuse 0Everyone had a great time
2014 World Cup is coming:
Mar 09th, 2014 - 12:59 pm - Link - Report abuse 0https://www.youtube.com/watch?v=XBZc179NXek
31. I see that the old drag queen was there to hand out subsidies for the terrible harvest and the loss of the USA trade benefits.
Mar 09th, 2014 - 02:38 pm - Link - Report abuse 0Looks like Mendoza is failing right along with the rest of the country.
Not a surprise.
Mendoza is wonderful and beautiful.
Mar 09th, 2014 - 02:45 pm - Link - Report abuse 0this video sucks!
https://www.youtube.com/watch?v=xCdYc8FgPN4&list=LLmXPTu1f8AdGlizWNiASx2A
I can see the dollar staying strong for some time yet. The UK has a vested interest in our North American allies/cousins doing well.
Mar 09th, 2014 - 03:28 pm - Link - Report abuse 0I cannot see any supposed rising power take the reserve currency. Russia already attempted that in 2008, still no change. Libya attempted that with the gold Dinar, still no change.
Looks as though China's attempt will soon fall flat. Many more defaults to occur through their shadow banking. Basically we're all FUBAR but the US are some of the least in trouble.
The US also has something that many nations do not. Trusted and hardworking allies who are prepared to share the burden.
That stupid Axel K, I wonder if he is our Axel, is begging business to stop “speculating” and invest.
Mar 09th, 2014 - 05:01 pm - Link - Report abuse 0Stupid Marxist has no idea how business works.
I can't wait until the temperature drops, one month of cold temps could bring an end to this madness.
The dollar has to be strong and good for you the Anglosphere. What I and the rest of the world thinks does not matter, since we do not use or need the dollar.
Mar 09th, 2014 - 08:26 pm - Link - Report abuse 0Make good use of it.
@34 Brasilouco....If you think “this video sucks!”, then why post it ?? seeing all those cannons got you excited, didn't it, poofta ?
Mar 09th, 2014 - 08:42 pm - Link - Report abuse 0@37 Brasilouco....“we do not use or need the dollar””.....well, in your case, considering that you don't have the means with which to leave your filthy slum, I agree that you have no need for the USD....
Look out for the next Brasileiro meltdown. ...
Mar 09th, 2014 - 11:25 pm - Link - Report abuse 0coming soon to a thread near you, soon!
@37 - there's a big difference between not using the dollar and wishing the USA to crumble. Your comment about declining power and to bring it back to the Anglosphere highlights you're quite the xenophobe.
Mar 09th, 2014 - 11:36 pm - Link - Report abuse 0You forget that the dollar has facilitated the expanse and domination of the USA post WW2. That dominance along with the support of their allies has led to some of the most stability the world has know in modern times.
If the USA's dominance falters the ideologies that will take over will lead to a new dark ages.
Most of the world who have benifitted from the Anglosphere will agree it has been a positive influence in the world. That would be many, many nations.
The interesting thing is that most nations who peacefully left the Anglosphere to re-join their original nation now regret it. Take Hong Kong for and example, the people their wish to rejoin the UK due to the interference and restrictions by Beijing. Once the 50year agreement of one county two systems is up Hing Kongers know they have the social delights of communism to enjoy (sarcasm alert).
Like I said many nations will dread the day that the USA is not on top as the ideologies that will take over will destroy the free world as they always have in he past.
We have to stop thinking like them.
Mar 10th, 2014 - 11:33 am - Link - Report abuse 0We have to stop buying their culture.
We have to stop buying their products.
We have to promote what is ours.
We have to look at our America and Africa and Asia and Oceania.
We have to avoid any approximation of North America and Europe.
We have to know the wiles of these barbarians.
We have to be prepared to face these traitors of humanity.
To Jack Bauer Nilla (in portuguese: Jack Baunilha) hahaha
It now strikes me as obvious, although I didn't realise at the time, that as we sat in my class and I obediently read out a section of Roald Dahl, my peers didn't simply hear the dull tones of my normal speaking-voice, they heard the mysterious and exclusive sounds of international success: English – the golden ticket to sought-after economic stability.
Mar 10th, 2014 - 11:48 am - Link - Report abuse 0http://www.theguardian.com/education/2014/mar/10/argentina-economic-stability-english-language
@41, Brasilouco.....as expected, your comments are beyond stupid...not going to waste my time commenting on them.
Mar 10th, 2014 - 06:52 pm - Link - Report abuse 0As to your last sentence, ”To Jack Bauer Nilla (in portuguese: Jack Baunilha) hahaha”......what a display of wit...I'm speechhless.
@ 8 Dog Dildo © Simon68 2012
Mar 10th, 2014 - 07:36 pm - Link - Report abuse 0AH, at last! The Bitcoin expert of Holland, the USA and Brazil here to give us the benefit of his financial wisdom no less.
And what did I tell you about Bitcoins, Dildo? And what has happened with Bitcoins Dildo?
YES, they were fucked by somebody taking advantage of the software in the world’s largest trader and what’s more the trader KNEW there was a problem and did nothing about it.
Did you lose your Bitcoin then Dildo?
I do hope so. HA, HA, HA.
The Wine Harvest festival is over. Summer vacation is over.
Mar 11th, 2014 - 03:14 am - Link - Report abuse 0Time to get back to work humiliating foreigners and ensuring top-notch quality here at Mercopress, as the fledgling Comptroller here.
Let's have a great 2014.
Tosser!
Mar 15th, 2014 - 07:28 pm - Link - Report abuse 0Commenting for this story is now closed.
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