I’m afraid I don’t know much about this topic. So far as I can see, it’s currently only to issue credit and grants to each other, but is that a lot to begin with? A sign of more to come? Financial armageddon for the U.S. (and thus a WH win for Republicans in '12)? 
USD as the global reserve currency remains the US’s balwark.
Conversely, I suspect that the reforms necessary aren’t going to be done while the US has a cheap way of maintaining the status quo. BRICS et al are taking the view that the status quo isn’t in their medium term interests. It isn’t in the US’s long term interests either.
Unless the Eurozone and/or Japan jump on the same wagon it isn’t going to be a game changing issue pre 2012. Anyhow, the chickens coming home to roost were hatched from eggs laid a long time ago.
I’ll believe it when I see it. Sorry, as someone operating in emerging markets, I have become quite jaded about these high level politically driven investment and econ collab announcements.
The US dollar is still the world’s main reserve currency at about 52%, the Euro coming a distant second and the pound stirling an even more distant third. This is in contrast to post WWII when the US$ was 80% and a very popular choice by most countries as a reserve currency.
Don’t forget, a country doesn’t award itself the dubious honor of being the world’s reserve currency. The power of the market does this, and many countries are now, very quietly, without much fanfare (don’t panic!!!), bailing out of the sinking US$.
Anecdote time. I recently purchased something ( an art repro) for US$299, something I hadn’t done for over six months, and when I checked my account it only cost me $284 Australian.
First time ever.
It’s not Armageddon time for the $US yet, but the signs are ominous.
The post WWII situation was an aberration, as much due to Europe being flat on its back after two world wars in close succession, as to anything specific to the US.
They’re reducing their exposure overall by diversification (which is normal, and in fact desirable for everyone), but buying of US treasuries is still strong.
World War II only.
Pre WWII most European countries, plus Australia and New Zealand, had managed to drag themselves out of the most severe phases of the depression, except for the US with its continually failing stimulus funding policies under Roosevelt.
Post WWII most European and Japanese industry was pretty much destroyed. A factor which helped US post war production tremendously and helped find employment for the demobilised US military, post war.
The UK with its newly installed Labour government under Attlee went another way and decided to continue its wartime run economy (rationing, nationalisation of coal, steel next, etc) and missed the boat, as far as a fast economic recovery was concerned.
As for diversification, this has gone far beyond the norm judging by the policies adopted, on the quiet, by many countries. For obvious reasons no one wants any rapid change to the status quo. That is why so many countries, particularly China, are moving away from the $US to other assets rather than the Euro, and doing it discreetly so as not to scare the horses.
I disagree with your rendition of this economic history, but regardless, my comment was from a perspective of taking WWI & WWII as a unit.
In any case “bailing out of a sinking US$” seems to me to be an overstatement.
Why is everything “financial armegeddon?”:dubious:
Have you guys ever been to a BRICS country? I just came back from Brazil and other than the beaches, I’m not impressed. The city of Sao Paulo looks like this. 20 million people mostly crammed into Favelas and public housing. There is massive income disparity. People either live in compounds with electrified concertina wire atop concrete walls or they live in cinder block and scrap metal shanties. Crime and homelessness is everywhere.
These are developing third world nations, not the new standard by which all others are judged.