BRIC Want Diverse System

The BRIC countries-Brazil,Russia,India and China-concluded their recent summit in Ekaterinburg,Russia by calling for a more diverse global monetary system.They did not attack the U.S. dollar,nor call for the development of new reserve currencies to supplement it,which Russia has called for on its own.China and the others do not want to risk devaluing the dollar further,since so much of their reserves consist of greenbacks.The BRIC countries called for systemic reform based on a democratic and transparent decision-making and implementation process at the international financial organizations.This reflects their fear that emerging markets could be pushed aside by developed economies during reform talks.

The World of Gold

Jewelry demand drives most of the annual trade in gold,says George Milling-Stanley of the World Gold Council,but it is investment demand that sends gold prices higher.Gold prices have been following oil because of their inverse relationship to the U.S. dollar,not to each other.Gold is accumulated,not consumed;that's why it is a form of money.Despite adverse economic conditions,jewelry demand was up in Q2.India produces 25% of the annual demand for gold.Global dollar gold demand reached new heights in Q2.Gold has an excellent 6,000 year track record as a hedge against inflation and geopolitical tension,making it desirable to hold in a portfolio.