Why the BRICS won't 'save' Europe

[Jefferson23]

By Pepe Escobar

This Thursday, in Washington, finance ministers and central bank governors of the BRICS group of emerging powers - Brazil, Russia, India, China and South Africa - will get together and, in the words of Brazilian Finance Minister Guido Mantega, "Talk about what to do to help the European Union get out of this situation."

Hold your horses. Is this an emerging cavalry to the rescue? Could this be the end of the eurozone (eurotrash?) self-induced liquidity panic? Or is this just the BRICS graphically showing the writing on the wall - pointing to which way the economic wind is blowing?

The basic (Brazilian) idea is for BRICS financial muscle to buy some extra European sovereign debt. But only "solid" bonds - from Germany or the United Kingdom - would qualify. The rationale is that BRICS will win by diversifying reserves - China at $3.2 trillion, Brazil at over $350 billion, India at over $320 billion - and make more money than investing in US Treasury bonds.

The thing is selected BRICS have been diversifying their reserves for quite a while - especially China, as well as Brazil (which still remains the US's 4th biggest creditor, with over $210 billion).

in full: http://www.atimes.com/atimes/Global_Economy/MI21Dj04.html