Are BRICS Agreements Signal of the Future Downfall of US Hegemony?

As I was looking through various news web sites this morning, I saw a couple of articles about agreements among BRICS (Brazil, Russia. India, China, and South Africa.) Specifically, these were economics related articles that may presage some quite different times for the US in dealing with the rest of the worldwide economic environment.

The first article was a short report from Reuters India that I found through twitter with a headline "China, Brazil sign trade, currency deal ahead of BRICS summit" and the lede:

BRICS members China and Brazil agreed on Tuesday to trade in their own currencies the equivalent of up to $30 billion per year, moving to take almost half of their trade exchanges out of the U.S. dollar zone.

The second article was from Bloomberg with the headline "BRICS Nations Plan New Bank to Bypass World Bank, IMF" and the lede:

The biggest emerging markets are uniting to tackle under-development and currency volatility with plans to set up institutions that encroach on the roles of the World Bank and International Monetary Fund.

The leaders of the so-called BRICS nations -- Brazil, Russia, India, China and South Africa -- are set to approve the establishment of a new development bank during an annual summit that began today in the eastern South African city of Durban, officials from all five nations say. They will also discuss pooling foreign-currency reserves to ward off balance of payments or currency crises.

Now, I am not an economist (quite thankfully,) I don't play one on TV, and I did not stay at a Holiday Inn Express last night. But I think that both of these actions will have far-reaching ramifications for the US and Europe. Taken individually, I think each of these articles are very big deals for international trade and US and European economies. Together, I think they represent a warning shot across the bows of Western Economic Hegemony. I think these nations are going to be competing with the World Bank and IMF very shortly and may well offer an alternative to the forced austerity. I think the situation on Cyprus could play out much differently if the Cypriots had an alternative to the Euro Finance Ministers requirements for a bailout.

We should all stay tuned to further developments as we continue to live the ancient (maybe not) Chinese curse, "May you live in interesting times."

And because I can:

Sometimes I Hate It When I'm Right

Last week when the Jobs Reports for December 2010 came out, I was a bit skeptical:

But you will pardon me if I'm a bit skeptical about this wonderful news. December is a time when there are a lot of short term hires due to the holiday season. I assume that ADP does make some adjustment for the seasonal factor and while 297K new jobs is definitely a good start, as I (and others) have noted recently, even if those jobs are something more than short term, minimum wage positions for the holidays, the odds are good that a lot of them are of the Perma-Temp fashion, with limited to no benefits. So I guess I'm going to hold off on the cheerleading the report.

Well, today (January 13) Initial Jobless Claims Report seems to bear out my skepticism. From CNN:

NEW YORK (CNNMoney) -- The number of Americans filing for their first week of unemployment benefits jumped sharply last week, two weeks after hitting a 2-1/2 year low below 400,000.

There were 445,000 initial jobless claims filed in the week ended Jan. 8, the Labor Department said in a weekly report Thursday.

That's up 35,000 from a revised 410,000 the previous week -- when jobless claims climbed back above 400,000 after falling below that mark for the first time in more than two years.

Last week's rise was bigger than expected. Economists surveyed by Briefing.com had forecast initial claims to edge up to 415,000 in the latest report.