Count me a skeptic. consider the euro, a currency created for a group of pretty similar, and geographically contiguous countries, and how it has been just another currency with no real shot at dethroning the dollar, although that was one of the key themes behind its creation. Now ask yourself, how will these 60 nations (or even the 5 original BRICS) create a monetary area that is better able to be synchronous than Europe. they can't and never will. plus you have the fact that India and China hate each other. do you think they want to share a currency? and as mentioned below, exactly what do they mean by gold-backed? is that at the central bank level? and if so, will the Chinese be willing to use their gold to pay Saudi Arabia when the Saudis decide to convert their BRICS currency into gold after a few years of surpluses with everyone?
This is a fantasy that has existed for a long time and will continue to exist. As if now, and for the foreseeable future, there is no alternative to the dollar as the major reserve and transaction currency.
1. The euro is just a stepchild of the dollar system.......just like the yen. The EU and Japs don't take a dump without dollar permission. The key to controlling everything and everybody, when there is a huge portion of the population against you, is to offer them something they will want without letting them know you control it as well. When we sneeze, they get a cold, and vice versa. So comparing a "rogue" system like BRICS to a vassal like the EU is comparing apples to oranges.
2. The huge difference between the US/EU/UK and the BRICS is the BRICS actually own real resources and make real things that other countries want. The US/EU/UK dynasty wants to push debt and paper and control all the labor, resources, and markets of the world.....while earning fat interest on their forced debt.
If I were Russia, I would have told the US/EU/UK they could kiss my ass long ago. The monetary, banking system of the dollar is predatory........period. It robs from anyone who holds dollars. Saudi Arabia is about to make the move the Russians have, and things will get ugly then. When dollars, euros, and pounds can't buy Russian oil, Saudi oil, Chinese labor markets and production, things are going to get interesting. When the US can't spend a trillion a year on their military budget but the Russians can sell arms and munitions to the rest of the world, the playing field is going to get readjusted.
People are tired of the punks over at the Fed. They have used up their usefulness and have become more trouble than they are worth. Sure there will be some problems to work through, but necessity is the mother of all invention.......and the necessity right now is to throw off the dollar infection/control.
Sucks for us Americans because we are a captive audience, and 98% will have no escape from the fallout.
Really? You imagine we have a difference of "opinion"? I am pretty sure it goes way beyond opinion.
People who push paper around for a living.......who get filthy rich pushing paper for things that don't even exist.......are parasites. That is not an opinion; that is fact.
They are riding and enriching themselves on the labors, talent and resources of others.
Reality says every "market" contains a certain amount of these parasites. We all know what happens when the parasites get too numerous and take over. It's even worse when the parasites start dictating policy.
Western "markets" are overrun by this parasitic class. Personally, I am tired of feeding them. I am looking for a shit-ton of de-wormer to be pumped into the system.........and I don't care who supplies it. If the BRICS can cut down some parasites, I am all for it.
understand I am not opining on the broad based problems that exist within the current financial and economic framework. I don't think there is any question that the haves enjoy the Cantillon effect and will continue to do so for as long as they can going forward. I also completely understand why there is such a huge desire by so many to overturn the 2nd amendment as it is the only thing that prevents totalitarianism.
However, I am simply discussing the concept of de-dollarization, which is a currently in vogue topic and that the BRICS are allegedly going to overturn. and while I don't doubt that they would love to be able to do that, the reality is that it remains incredibly unlikely. the devil, as always, is in the details, and saying a currency is gold backed because governments or central banks have some amount of gold in their vault is missing a key issue, the convertibility aspect of gold backing. if a person, or even a country, cannot convert their currency to gold on demand, then it is all so much BS, and really no different than the current fiat situation.
In the end, the network effects of the dollar and the fact that the US dollar capital markets dwarf all others is what will keep the dollar at the pinnacle of all global currencies. going digital will not change this fact, as a digital yuan, or BRICS currency or anything else, that is under the control of any other institution remains equally subject to the problems that holding dollars does for those non-US entities that would like to rid themselves of the dollar hegemony. So, unless you can demonstrate that there is a true replacement, a currency or asset that is fungible, liquid, has deep capital markets and the rule of law underpinning it, then this is wishful thinking.
all your talk of parasites, while maybe apt descriptions, does not change those facts that drive global finance as we know it.
And I agree with you, but you underestimate or are maybe a little too confident and comfortable in the nut lock the dollar has on financial markets. I am not 100% confident that those that run the dollar are all that keen on keeping the dollar.......if they can maintain their control.
You mention "rule of law." That is the main problem I see. The US has become a lawless raider. They act all pious and tout the "rule of law" but they have no problem changing the rules overnight if it suits them. When people/countries believe they are being treated unfairly, and having it rubbed in their faces, they start seeking an alternative.
Liquidity is the problem, is it not? There is so much debt that a certain amount of liquidity is necessary to keep the debt afloat........yet, that liquidity demand is now killing the remaining value of the dollar. How long do you see that continuing? The parasites are no longer just taking their cut, but bleeding the host to death. I believe that when that level is hit, time gets short.
Andy... there is an alternative. But it requires we amend the U.S. Constitution and allow other things to be legal tender as parties might agree to (e.g. crypto). It also requires we circumscribe Congress' monetary authority to strictly public legal tender.
If Congress wants taxes paid in dollars, fine. If they want to issue and redeem debt in dollars fine. But otherwise - private legal tender - they can leave us alone to go our own way.
Apart from rescinding Congress' monetary authorities vis-a-vis private legal tender, crypto is just a digital, stateless, speculative FOREX play.
John, there are innumerable problems with the way the current framework has evolved and there is no question the fiat currency system has myriad flaws from a real perspective. However, as much as I would personally like to see significant changes and a return to a true hard money regime, I am realistic enough to understand that short of an actual revolution, overthrowing the US government, it is not going to happen.
Ironically, the downfall is in the fact that Congress controls what money means, and while a constitutional convention would be great (term limits please, maybe one and done), I fear it is just not in the cards for the foreseeable future. As such, the current system is what we are going to live with and it is in all of our interests to understand that and figure out how best to thrive in this situation.
my greater fear is the introduction of a CBDC and the complete taking over of personal financial affairs by the government. at that point, I suspect that barter is going to make a comeback, or that something else will replace effective tender, if not legal tender. whether that is gold, silver, cowrie shells or tally sticks, or more likely something else, I have no idea. but that is the prospect that frightens me far more than a supposed BRICS currency which will be stillborn in my opinion.
Andy... The problem is this reflects normalcy bias. How quickly will a fiat collapse overtake us? That is how quickly everything you assume to be true/normal will change. The real question is are we prepared to pivot to a new normal. They want a Great Reset? OK, we'll give them one... the Digital Liberties Amendment. And no, it will not take another Daniel Shays Rebellion (look that up if you're not familiar with it). They did not have a Constitution then (it came about largely because of the Daniel Shays Rebellion). We do not need to become like the French...
Whether BRICS intends direct conversion by anyone holding their currency is a big question. And if that's what they 'promise' (you can convert their currency to gold), you'll have to ask: To whom will you appeal when they don't? When they say "Sorry sir/ma'am, your social credit score does not allow you to redeem your notes for gold." --- what court will you go to? A CCP court? (please). A Russian court?
I agree with QTR on the merits of de-dollarizing. But until you understand "legal tender" you don't see the full picture. https://digitallibertiesamendment.com
And yet the price of gold didn’t move up at all. Talk is cheap. Let’s see what happens when someone actually asks for their gold exchanged for the BRIC currency.
You mean the way everyone was trading dollars for gold pre-1971......or pre-1933?
That is not the point. It is about trust, integrity, real intrinsic value, about a standard that doesn't change overnight at the whim of a Fed bankster. Will it be a currency that is used to bail out their fellow banksters, insurance rat holes, and other corporate whores when they overextend themselves? Will it be a currency that will bail out those greedy bastards who f'd up but are now crying they are "too big to fail"? Will it be a currency that can be printed in unlimited amounts to buy off whatever despot or whore needs buying off?
Those are the questions I am interested in the answers to........not whether you can walk up to a "window" and demand your gold. I can buy all the gold I can afford.....right......now.......with these dollars that aren't "backed by gold." So what? A real, global currency needs a real floor under it so that banksters can't inflate and deflate it at will and rob you of your labor and wealth. If backing it with gold just limits the amount they can steal, then I am all for it.
Gold backed currency is very unlikely to happen, there are some parts of the puzzle missing. The main reason is all the trust that is needed. Who audits the gold, what about its purity etc. At best, they might do what China does with the offshore Yuan, its convertible to gold.
The dollar could have had a much longer reign had the manipulation and just outright insanity not been so over-the-top IMO. But really, why should there be a hegemonic fiat currency in the first place?! Or conversely, why wouldn't a gold-backed currency be a better option to that?
The other thing that a gold-backed currency could be is something that is a whole lot harder to manipulate the price of using manufactured spooky stories (i.e., like the entire US market has become). I'm tired of my 401K dramatically losing value (and time) because so-and-so said such-and-such.
The pushed it and pushed it and here we are. About time IMO!
This cannot happen with the current level of debt and fiscal deficits. It is wishful thinking. The world needs the inflation. It would create an economic depression. Now, this might happen in the future, but not as product of a BRICS meeting, but as a product of a financial collapse and after a hyperinflation crisis of the US Dollar. I hope not to be alive then, because will come with war, civil unrest and the end of the world as we know it.
Skeptical because this is China and Russia. Can we actually trust those two to maintain a gold peg? They will abandons it or modify it if doing so serves their best interests. I have little to no trust in them.
But excided because a stable currency is amazing for reserves. Once institutions realize the benefits of it they will demand that the ECB and US Federal Reserve make something similar. And we will have three gold backed currencies, the US Dollar Backed by Gold, Euro Backed by Gold, and BRICS currency backed by gold. And once again the entity with most trust will get used...which will most likely become the US Federal Reserve again.
I love the way people flippantly throw around comments. It's like someone saying, "Film me poking that bear in the ass with this sharp stick."
Not sure you are aware, but the Russians have this thing called a nuclear arsenal......the world's largest. But people like you pretend they are just for show and will never be used. Putin has done everything he said he would do. He has stated that if the sovereignty of Russia is threatened, nukes will be deployed. Building a NATO vassal called Ukraine and arming it with a cornucopia of Western military equipment comes under the definition of a "threat to Russia's sovereignty."
So go on and live in your little bubble and imagine you are untouchable and safe from all harm. Reality hits like a nine pound hammer.....upside the head.
Unlike you, I believe there are lying, thieving crooks in not just DC and London. But also in Moscow and Beijing. Thinking Russia and China are good is absurdly dumb.
So........why are you pointing out your distrust of Russia and China as if it is something unique in the world in which we live?
Hello!.......That is what the gold if for........some sense of accountability.......some actual foundation. The fact that they are willing to consider a gold "standard" gives them way more credibility than the banksters in London and New York.
Please document the last time Russia or China stole someone's reserves. Please don't play me that song and dance about the patent bullshit. If people knew what a crooked state of affairs the entire patent world is, they would laugh to think people take it seriously.
When you take some time to consider both sides........like some research into the Crimean War and the Opium Wars.......then you can get back to me. The West is reaping the whirlwind......they deserve. Insinuating that I said Russia and China were "good" is absurdly dumb.
I was your subscriber too, but your investment method is wrong.
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The Bank of Korea (BOK) has a foreign exchange reserve with the majority (over 70% as of the end of last year) consisting of currencies other than the US dollar, such as the euro, Japanese yen, Chinese yuan, and others. The proportion of gold holdings in the foreign exchange reserves slightly exceeds 1%. However, the BOK believes that there is not a significant need to increase the amount of gold holdings.
The BOK's position is based on the view that gold is not an actively adjustable asset in response to market expectations, unlike other currencies. The perception that gold is considered a last resort among foreign reserves could potentially send unexpected signals to the market if it is sold. Therefore, the BOK suggests that it may be a better choice to adequately supply liquidity in US dollars rather than expanding gold holdings.
Additionally, the BOK considers the uncertain potential for future price increases in gold. They mention that gold prices are already approaching historical highs, and there is uncertainty regarding its future upward potential. Factors such as the strength of the US dollar, which can occur at any time based on global economic conditions, and the opportunity cost of holding gold in terms of real interest rates turning positive, can also act as constraints on gold price increases.
Billy... Your Y axis is wrong... Everything you have said here assumes the value of gold is measured by something else at the Y axis. As long as you assume a fiat unit of measure at your Y axis, you are whistling past your own economic grave. The Weimar Deutschmark was such a fiat unit. What became of the charts with the Weimar Deutschmark at the Y axis? There has never been a fiat monetary unit that did not end in such meaninglessness. There never will be.
The BOK is wrong. A monetary unit backed by gold is easily adjusted to respond to market conditions. The problem is it has to be adjusted by legislation, not by banking fiat. The politicians are loath to accept such responsibility - although that is their job. The banks today simply do not know how to imagine an economic system where they do not have this kind of fiat power. It is hard to get someone to understand something when their own livelihood depends on them not understanding it.
Gold is money for one simple reason: Gold does not rust. If you measure something using a weight in gold (or silver), however long you want to consider, after that period of time, the gold or silver will still weigh the same.
The problem with a gold backed currency is this: When the bureaucrat across the desk refuses to redeem your currency for gold (say, because your social credit score is not to the satisfaction of the people holding the gold) where will you go? To whom will you appeal? A CCP court in China? A Russian court?
If this is a sovereign trading currency only (aka a "Bretton Woods II") it will cause a tsunami of dollars from outside the US to crash ashore, and prices here will chase the excess. It will be really bad. But a BRICS currency cannot replace the dollar for everyday commerce unless (meaning a tender used to extinguish a debt) unless you think you will get a fair hearing in one of their courts.
As long as the US Dollar retains its monopoly on legal tender in the U.S., we will teeter at the edge of a gaping economic grave. See here for the solution:
I don't understand the logic behind the quote from Thorsten Polleit, chief economist at Degussa, "For making the new currency as good as gold, a truly sound currency, it must be convertible into gold on demand." Why? A gold BACKED currency and a gold CONVERTABLE currency are not the same thing. As long as the gold backing the currency can be regularly audited (i.e. trusted) then the currency can hold its value against gold regardless of the ability to convert the currency to physical gold. The lesson of history is that if you have a convertible currency, eventually people will convert. I don't think they'll make that mistake.
Furthermore, the little I've seen published on this seems to indicate that this will be a trading currency, not a reserve currency. Basically, a way for these nations to trade without using the US dollar or having to sit on loads of US dollars the value of which is being eaten away by inflation every year.
The question I have had with going back to a gold standard is the same thing I questioned about crypto from the beginning. The world population is 8 billion people. There are less than 6 billion oz of gold in the world (per google).
How does a transaction work? I will buy that cheeseburger for .000000000001 of gold or its currency value?
Does gold end up going from $2K oz to $100,000,000,000 an oz?
This assumes that the BRICS or whoever is going to run this gold currency owns every oz of Gold in the world - which they do not.
Does this make some coin collector in Kansas an instant billionaire because he has a safe full of coins?
We screwed up 50 years ago - now I do not see a logical way to return to that system.
It doesn't have to be backed 1:1. The Swiss Franc has been a gold backed currency like forever.
It's about having something other than debt as your asset base. It is about energy and real production backing your currency.
When a company or individual goes belly up, creditors are glad to get "pennies on the dollar" for whatever is left. If you held the currency of two different countries, the one that has gold backing its currency will cause you a lot less concern......even though the ration isn't 1:1. Hell, the best it ever was in the US was $20:1oz.
Right now, in a "fair market," gold should be at least $5,000 an oz. When we left the gold standard, the debt was $398 billion.......at $35 an oz. The debt has gone up 80 fold since then. The money supply has gone through the roof since 1971.
The gold standard simply puts some kind of floor under the money........which is better than nothing. Notice the price of gold hasn't moved on this news. That is complete bullshit. Banksters hate gold.......central PRIVATE banksters........like the ones that control the West......hate gold.
It will be interesting to see what happens as gold goes up in dollars around the world. When an oz of gold in China will get you $3,000 dollars, and you can then take that money and buy over 1.5 oz in the US, what do you think will happen then?
Gold is real money. Everything else is a promise to pay.
The US is rich with IOU's.....
Count me a skeptic. consider the euro, a currency created for a group of pretty similar, and geographically contiguous countries, and how it has been just another currency with no real shot at dethroning the dollar, although that was one of the key themes behind its creation. Now ask yourself, how will these 60 nations (or even the 5 original BRICS) create a monetary area that is better able to be synchronous than Europe. they can't and never will. plus you have the fact that India and China hate each other. do you think they want to share a currency? and as mentioned below, exactly what do they mean by gold-backed? is that at the central bank level? and if so, will the Chinese be willing to use their gold to pay Saudi Arabia when the Saudis decide to convert their BRICS currency into gold after a few years of surpluses with everyone?
This is a fantasy that has existed for a long time and will continue to exist. As if now, and for the foreseeable future, there is no alternative to the dollar as the major reserve and transaction currency.
You miss some major points.
1. The euro is just a stepchild of the dollar system.......just like the yen. The EU and Japs don't take a dump without dollar permission. The key to controlling everything and everybody, when there is a huge portion of the population against you, is to offer them something they will want without letting them know you control it as well. When we sneeze, they get a cold, and vice versa. So comparing a "rogue" system like BRICS to a vassal like the EU is comparing apples to oranges.
2. The huge difference between the US/EU/UK and the BRICS is the BRICS actually own real resources and make real things that other countries want. The US/EU/UK dynasty wants to push debt and paper and control all the labor, resources, and markets of the world.....while earning fat interest on their forced debt.
If I were Russia, I would have told the US/EU/UK they could kiss my ass long ago. The monetary, banking system of the dollar is predatory........period. It robs from anyone who holds dollars. Saudi Arabia is about to make the move the Russians have, and things will get ugly then. When dollars, euros, and pounds can't buy Russian oil, Saudi oil, Chinese labor markets and production, things are going to get interesting. When the US can't spend a trillion a year on their military budget but the Russians can sell arms and munitions to the rest of the world, the playing field is going to get readjusted.
People are tired of the punks over at the Fed. They have used up their usefulness and have become more trouble than they are worth. Sure there will be some problems to work through, but necessity is the mother of all invention.......and the necessity right now is to throw off the dollar infection/control.
Sucks for us Americans because we are a captive audience, and 98% will have no escape from the fallout.
and that's what makes markets, differences of opinions
Really? You imagine we have a difference of "opinion"? I am pretty sure it goes way beyond opinion.
People who push paper around for a living.......who get filthy rich pushing paper for things that don't even exist.......are parasites. That is not an opinion; that is fact.
They are riding and enriching themselves on the labors, talent and resources of others.
Reality says every "market" contains a certain amount of these parasites. We all know what happens when the parasites get too numerous and take over. It's even worse when the parasites start dictating policy.
Western "markets" are overrun by this parasitic class. Personally, I am tired of feeding them. I am looking for a shit-ton of de-wormer to be pumped into the system.........and I don't care who supplies it. If the BRICS can cut down some parasites, I am all for it.
understand I am not opining on the broad based problems that exist within the current financial and economic framework. I don't think there is any question that the haves enjoy the Cantillon effect and will continue to do so for as long as they can going forward. I also completely understand why there is such a huge desire by so many to overturn the 2nd amendment as it is the only thing that prevents totalitarianism.
However, I am simply discussing the concept of de-dollarization, which is a currently in vogue topic and that the BRICS are allegedly going to overturn. and while I don't doubt that they would love to be able to do that, the reality is that it remains incredibly unlikely. the devil, as always, is in the details, and saying a currency is gold backed because governments or central banks have some amount of gold in their vault is missing a key issue, the convertibility aspect of gold backing. if a person, or even a country, cannot convert their currency to gold on demand, then it is all so much BS, and really no different than the current fiat situation.
In the end, the network effects of the dollar and the fact that the US dollar capital markets dwarf all others is what will keep the dollar at the pinnacle of all global currencies. going digital will not change this fact, as a digital yuan, or BRICS currency or anything else, that is under the control of any other institution remains equally subject to the problems that holding dollars does for those non-US entities that would like to rid themselves of the dollar hegemony. So, unless you can demonstrate that there is a true replacement, a currency or asset that is fungible, liquid, has deep capital markets and the rule of law underpinning it, then this is wishful thinking.
all your talk of parasites, while maybe apt descriptions, does not change those facts that drive global finance as we know it.
And I agree with you, but you underestimate or are maybe a little too confident and comfortable in the nut lock the dollar has on financial markets. I am not 100% confident that those that run the dollar are all that keen on keeping the dollar.......if they can maintain their control.
You mention "rule of law." That is the main problem I see. The US has become a lawless raider. They act all pious and tout the "rule of law" but they have no problem changing the rules overnight if it suits them. When people/countries believe they are being treated unfairly, and having it rubbed in their faces, they start seeking an alternative.
Liquidity is the problem, is it not? There is so much debt that a certain amount of liquidity is necessary to keep the debt afloat........yet, that liquidity demand is now killing the remaining value of the dollar. How long do you see that continuing? The parasites are no longer just taking their cut, but bleeding the host to death. I believe that when that level is hit, time gets short.
Andy... there is an alternative. But it requires we amend the U.S. Constitution and allow other things to be legal tender as parties might agree to (e.g. crypto). It also requires we circumscribe Congress' monetary authority to strictly public legal tender.
If Congress wants taxes paid in dollars, fine. If they want to issue and redeem debt in dollars fine. But otherwise - private legal tender - they can leave us alone to go our own way.
Apart from rescinding Congress' monetary authorities vis-a-vis private legal tender, crypto is just a digital, stateless, speculative FOREX play.
https://digitallibertiesamendment.com/
Would love to hear your thoughts.
John, there are innumerable problems with the way the current framework has evolved and there is no question the fiat currency system has myriad flaws from a real perspective. However, as much as I would personally like to see significant changes and a return to a true hard money regime, I am realistic enough to understand that short of an actual revolution, overthrowing the US government, it is not going to happen.
Ironically, the downfall is in the fact that Congress controls what money means, and while a constitutional convention would be great (term limits please, maybe one and done), I fear it is just not in the cards for the foreseeable future. As such, the current system is what we are going to live with and it is in all of our interests to understand that and figure out how best to thrive in this situation.
my greater fear is the introduction of a CBDC and the complete taking over of personal financial affairs by the government. at that point, I suspect that barter is going to make a comeback, or that something else will replace effective tender, if not legal tender. whether that is gold, silver, cowrie shells or tally sticks, or more likely something else, I have no idea. but that is the prospect that frightens me far more than a supposed BRICS currency which will be stillborn in my opinion.
Andy... The problem is this reflects normalcy bias. How quickly will a fiat collapse overtake us? That is how quickly everything you assume to be true/normal will change. The real question is are we prepared to pivot to a new normal. They want a Great Reset? OK, we'll give them one... the Digital Liberties Amendment. And no, it will not take another Daniel Shays Rebellion (look that up if you're not familiar with it). They did not have a Constitution then (it came about largely because of the Daniel Shays Rebellion). We do not need to become like the French...
Whether BRICS intends direct conversion by anyone holding their currency is a big question. And if that's what they 'promise' (you can convert their currency to gold), you'll have to ask: To whom will you appeal when they don't? When they say "Sorry sir/ma'am, your social credit score does not allow you to redeem your notes for gold." --- what court will you go to? A CCP court? (please). A Russian court?
I agree with QTR on the merits of de-dollarizing. But until you understand "legal tender" you don't see the full picture. https://digitallibertiesamendment.com
And yet the price of gold didn’t move up at all. Talk is cheap. Let’s see what happens when someone actually asks for their gold exchanged for the BRIC currency.
You mean the way everyone was trading dollars for gold pre-1971......or pre-1933?
That is not the point. It is about trust, integrity, real intrinsic value, about a standard that doesn't change overnight at the whim of a Fed bankster. Will it be a currency that is used to bail out their fellow banksters, insurance rat holes, and other corporate whores when they overextend themselves? Will it be a currency that will bail out those greedy bastards who f'd up but are now crying they are "too big to fail"? Will it be a currency that can be printed in unlimited amounts to buy off whatever despot or whore needs buying off?
Those are the questions I am interested in the answers to........not whether you can walk up to a "window" and demand your gold. I can buy all the gold I can afford.....right......now.......with these dollars that aren't "backed by gold." So what? A real, global currency needs a real floor under it so that banksters can't inflate and deflate it at will and rob you of your labor and wealth. If backing it with gold just limits the amount they can steal, then I am all for it.
Gold backed currency is very unlikely to happen, there are some parts of the puzzle missing. The main reason is all the trust that is needed. Who audits the gold, what about its purity etc. At best, they might do what China does with the offshore Yuan, its convertible to gold.
So you imagine that announcement is a joke? Like they are going to come out in August and say, "We were just kidding."?
You're funny.
Sorry I am not as smart as you.........but I can at least keep up with who is replying to whom on an Internet comment board.
Can you feel that heat yet?
The dollar could have had a much longer reign had the manipulation and just outright insanity not been so over-the-top IMO. But really, why should there be a hegemonic fiat currency in the first place?! Or conversely, why wouldn't a gold-backed currency be a better option to that?
The other thing that a gold-backed currency could be is something that is a whole lot harder to manipulate the price of using manufactured spooky stories (i.e., like the entire US market has become). I'm tired of my 401K dramatically losing value (and time) because so-and-so said such-and-such.
The pushed it and pushed it and here we are. About time IMO!
This cannot happen with the current level of debt and fiscal deficits. It is wishful thinking. The world needs the inflation. It would create an economic depression. Now, this might happen in the future, but not as product of a BRICS meeting, but as a product of a financial collapse and after a hyperinflation crisis of the US Dollar. I hope not to be alive then, because will come with war, civil unrest and the end of the world as we know it.
I am both excided and skeptical of it.
Skeptical because this is China and Russia. Can we actually trust those two to maintain a gold peg? They will abandons it or modify it if doing so serves their best interests. I have little to no trust in them.
But excided because a stable currency is amazing for reserves. Once institutions realize the benefits of it they will demand that the ECB and US Federal Reserve make something similar. And we will have three gold backed currencies, the US Dollar Backed by Gold, Euro Backed by Gold, and BRICS currency backed by gold. And once again the entity with most trust will get used...which will most likely become the US Federal Reserve again.
Please share with us the record of trustworthiness on the national level.
You must have missed that part where the US and it's cronies stole $350 billion in Russian bank accounts.
So you wouldn't trust the Russians or Chinese but you are okay with the lying, thieving crooks running DC, London, and Paris, et al? Priceless.
Do yourself a favor, go read about the original Crimean War and the Opium Wars......and wake the hell up.
Time to put the $350b in a Let’s Rebuild Ukraine GoFundMe account…
Really? LOL
I love the way people flippantly throw around comments. It's like someone saying, "Film me poking that bear in the ass with this sharp stick."
Not sure you are aware, but the Russians have this thing called a nuclear arsenal......the world's largest. But people like you pretend they are just for show and will never be used. Putin has done everything he said he would do. He has stated that if the sovereignty of Russia is threatened, nukes will be deployed. Building a NATO vassal called Ukraine and arming it with a cornucopia of Western military equipment comes under the definition of a "threat to Russia's sovereignty."
So go on and live in your little bubble and imagine you are untouchable and safe from all harm. Reality hits like a nine pound hammer.....upside the head.
Unlike you, I believe there are lying, thieving crooks in not just DC and London. But also in Moscow and Beijing. Thinking Russia and China are good is absurdly dumb.
So........why are you pointing out your distrust of Russia and China as if it is something unique in the world in which we live?
Hello!.......That is what the gold if for........some sense of accountability.......some actual foundation. The fact that they are willing to consider a gold "standard" gives them way more credibility than the banksters in London and New York.
Please document the last time Russia or China stole someone's reserves. Please don't play me that song and dance about the patent bullshit. If people knew what a crooked state of affairs the entire patent world is, they would laugh to think people take it seriously.
When you take some time to consider both sides........like some research into the Crimean War and the Opium Wars.......then you can get back to me. The West is reaping the whirlwind......they deserve. Insinuating that I said Russia and China were "good" is absurdly dumb.
I was your subscriber too, but your investment method is wrong.
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The Bank of Korea (BOK) has a foreign exchange reserve with the majority (over 70% as of the end of last year) consisting of currencies other than the US dollar, such as the euro, Japanese yen, Chinese yuan, and others. The proportion of gold holdings in the foreign exchange reserves slightly exceeds 1%. However, the BOK believes that there is not a significant need to increase the amount of gold holdings.
The BOK's position is based on the view that gold is not an actively adjustable asset in response to market expectations, unlike other currencies. The perception that gold is considered a last resort among foreign reserves could potentially send unexpected signals to the market if it is sold. Therefore, the BOK suggests that it may be a better choice to adequately supply liquidity in US dollars rather than expanding gold holdings.
Additionally, the BOK considers the uncertain potential for future price increases in gold. They mention that gold prices are already approaching historical highs, and there is uncertainty regarding its future upward potential. Factors such as the strength of the US dollar, which can occur at any time based on global economic conditions, and the opportunity cost of holding gold in terms of real interest rates turning positive, can also act as constraints on gold price increases.
Billy... Your Y axis is wrong... Everything you have said here assumes the value of gold is measured by something else at the Y axis. As long as you assume a fiat unit of measure at your Y axis, you are whistling past your own economic grave. The Weimar Deutschmark was such a fiat unit. What became of the charts with the Weimar Deutschmark at the Y axis? There has never been a fiat monetary unit that did not end in such meaninglessness. There never will be.
The BOK is wrong. A monetary unit backed by gold is easily adjusted to respond to market conditions. The problem is it has to be adjusted by legislation, not by banking fiat. The politicians are loath to accept such responsibility - although that is their job. The banks today simply do not know how to imagine an economic system where they do not have this kind of fiat power. It is hard to get someone to understand something when their own livelihood depends on them not understanding it.
Gold is money for one simple reason: Gold does not rust. If you measure something using a weight in gold (or silver), however long you want to consider, after that period of time, the gold or silver will still weigh the same.
The problem with a gold backed currency is this: When the bureaucrat across the desk refuses to redeem your currency for gold (say, because your social credit score is not to the satisfaction of the people holding the gold) where will you go? To whom will you appeal? A CCP court in China? A Russian court?
If this is a sovereign trading currency only (aka a "Bretton Woods II") it will cause a tsunami of dollars from outside the US to crash ashore, and prices here will chase the excess. It will be really bad. But a BRICS currency cannot replace the dollar for everyday commerce unless (meaning a tender used to extinguish a debt) unless you think you will get a fair hearing in one of their courts.
As long as the US Dollar retains its monopoly on legal tender in the U.S., we will teeter at the edge of a gaping economic grave. See here for the solution:
https://digitallibertiesamendment.com/
I don't understand the logic behind the quote from Thorsten Polleit, chief economist at Degussa, "For making the new currency as good as gold, a truly sound currency, it must be convertible into gold on demand." Why? A gold BACKED currency and a gold CONVERTABLE currency are not the same thing. As long as the gold backing the currency can be regularly audited (i.e. trusted) then the currency can hold its value against gold regardless of the ability to convert the currency to physical gold. The lesson of history is that if you have a convertible currency, eventually people will convert. I don't think they'll make that mistake.
Furthermore, the little I've seen published on this seems to indicate that this will be a trading currency, not a reserve currency. Basically, a way for these nations to trade without using the US dollar or having to sit on loads of US dollars the value of which is being eaten away by inflation every year.
The question I have had with going back to a gold standard is the same thing I questioned about crypto from the beginning. The world population is 8 billion people. There are less than 6 billion oz of gold in the world (per google).
How does a transaction work? I will buy that cheeseburger for .000000000001 of gold or its currency value?
Does gold end up going from $2K oz to $100,000,000,000 an oz?
This assumes that the BRICS or whoever is going to run this gold currency owns every oz of Gold in the world - which they do not.
Does this make some coin collector in Kansas an instant billionaire because he has a safe full of coins?
We screwed up 50 years ago - now I do not see a logical way to return to that system.
It doesn't have to be backed 1:1. The Swiss Franc has been a gold backed currency like forever.
It's about having something other than debt as your asset base. It is about energy and real production backing your currency.
When a company or individual goes belly up, creditors are glad to get "pennies on the dollar" for whatever is left. If you held the currency of two different countries, the one that has gold backing its currency will cause you a lot less concern......even though the ration isn't 1:1. Hell, the best it ever was in the US was $20:1oz.
Right now, in a "fair market," gold should be at least $5,000 an oz. When we left the gold standard, the debt was $398 billion.......at $35 an oz. The debt has gone up 80 fold since then. The money supply has gone through the roof since 1971.
The gold standard simply puts some kind of floor under the money........which is better than nothing. Notice the price of gold hasn't moved on this news. That is complete bullshit. Banksters hate gold.......central PRIVATE banksters........like the ones that control the West......hate gold.
It will be interesting to see what happens as gold goes up in dollars around the world. When an oz of gold in China will get you $3,000 dollars, and you can then take that money and buy over 1.5 oz in the US, what do you think will happen then?
https://youtu.be/ajbb6qaPIqA