BRICS Gold Backed Currency: Where Is It?
We were promised by many that a gold back currency would be released at the BRICS summit. It concluded today and there was no announcement.
What happened? Where is the currency that the gold bugs promised us was coming to obliterate the U.S. dollar?
The answer is simple:
It isn't happen because it is a foolish idea.
Nevertheless, there were many promising that it was coming. Of course, the BRICS stated they want to increase the trade done in their local currencies. This is a topic I will attack in another article.
For now, we will focus upon gold backed currency.
Failure To Understand History
Gold bugs simply are wrong.
They believe that gold is a hedge against inflation and that fiat currency is what causing price increases.
Of course, this does not explain the situations (notice the plural) in the 1500s in Spain, which was using commodity backed currency. It was a time when that country had a number of bouts of inflation.
Why was this?
Because the capital flow was into that country. Spain pulled gold from other areas of the world into its home country. This sent prices soaring at home.
Here is another example: The 1800s gold rush.
In California, hotels rooms and boarding house rentals skyrocketed. They were charging $10K per month when something comparable, in New York City, was a few bucks. The amount of gold that was in that area caused massive inflation.
Regardless of what the form of money, the business cycle is always in effect. When things are expanding, prices increase. After the peak, when the descent happens, prices go down.
This has taken place for a thousand years.
The arrogance of gold bugs, Marxists, and central bankers is all the same. They believe they can change the business cycle and they cannot.
A BRICS Central Bank
As for the currency, are they going to set up a BRICS central bank? How are they going to distribute this currency? And, even more importantly, how are they going to settle?
To make this work, a single central bank would be required and that would likely be controlled by China. Do anyone think India is going to agree to that?
Not a chance.
Make no mistake, with the CCP in charge, there is a totalitarian state in charge. While other countries are equally as tyrannical, they aren't about to enter under the thumb of someone else.
After all, they already suffer from being impacted by the United States, are they going to want to succumb to China?
The reality is that China and India almost never agree on anything.
There is another piece to this puzzle: India wants the rupee to be utilized by other countries.
Belief in Government
It is amazing to see how much the gold bugs believe in government.
To achieve what is being described means that governments are going to be successful at setting up an international currency along with a financial system that supports it. In other articles I discussed how the central bank system was outdated by the end of World War II and how governments tried to avoid currency repeats from the decade prior by limiting capital flow.
As it turns out, Bretton Woods was dead on arrival from the start and it had nothing to do with Nixon. We were entering a period of massive expansion of the global system and the geniuses at the time, including politicians, academics, and bureaucrats, thought restriction was the proper path.
It was what opened the door for the Eurodollar System.
Do you know who didn't believe in government? The bankers. They listened to the market by seeing demand and filling it. This is where the system sprung from.
The Eurodollar System was the way around capital flow restrictions without the hindrance of central banks or governments.
Yet, today, government officials, politicians and bureaucrats, are going to figure it out? Again, if we look at history, we see how governments, central banks, monarchies, or any other "authority" never got the money supply right.
The situation will be exposed as soon as the need for monetary expansion outpaces the amount of gold. Suddenly, trade is restricted, just like in the past.
Like always, there is a lot of noise around this nonsense and it never comes into being.
Of course, this is normal, especially with the BRICS. In over 20 years of summit, what substantial have ever come out of them?
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BRICS are the future of the world's economies with China and mother Russia leading the new world order.
PS: colombia was invited to the BRICS but I don't think I'm there because of the submission thing sometimes I hate my country 😭.
Los BRICS son el futuro de las economías en el mundo con china y madre Rusia liderando el nuevo orden del mundo
PD: colombia fue invitado al BRICS pero no creo que esté por cosa sumisión a veces odio mi país 😭
Considering both of those countries have major demographics issues, it is likely their economies look like Japan in a decade.
It is good to dream 😭
Interesting. What is America doing? I don't want BRICS to fail. I don't like their bad mood.
!PIZZA
What is America doing in terms of what? I am not following the question.
The US is suppressing Crypto as well. I think that the influence on the countries of the world is also declining.
I asked because I was hoping that the United States would respond to the alliance with Russia and China .
It is a rather convoluted situation.
The U.S. is losing dominance, some claim by choice. It is less interested in patroling the oceans like it did in the past. This means it took a step back.
Russia and China are not going to succumb to the U.S. Nor is the U.S going to be able to beat them in a conflict. The neocons have been trying to take Russia down for 30 years, without success (let alone China).
From an economic standpoint, the US has one advantage: it can wait for demographics to screw both China and Russia.
$PIZZA slices delivered:
@tin.aung.soe(1/10) tipped @taskmaster4450le
"They believe that gold is a hedge against inflation and that fiat currency is what causing price increases."
Fiat currency does cause inflation (though it is far from the only thing) and gold does act as a hedge against inflation (generally and over the long run, that doesn't mean that is true in every situation in every moment of history).
An increase in the quantity of the currency can cause inflation (actually by definition IS inflation). It's just that it is far easier to inflate fiat currency than it is to inflate gold. Doesn't mean gold can never flood the market for some reason or another. Stick a bar of gold under your mattress for 20 years and do the same with the equivalent cash in the currency of your choice and I'm willing to bet that bar of gold that it will be worth more.
Fiat currencies are fine provided governments and central banks can be trusted to manage them properly. Personally, I don't have a whole lot of trust. Fiat currencies are fine for things other than a vehicle for savings.
None of this means I have any confidence whatsoever in BRICS. I don't. Among an ocean of untrustworthy governments, those countries are at the top of the list for the most part.
Under fractional reserve lending, the government or central banks do not control the money supply so why do people keep acting like they do.
And yes what you cite is inflation. That is the true definition although people hijacked it to mean price increases.
An increase in the money supply does not mean price are going to increase. And there are a lot of people realizing that deflationary money is sound which isnt the case. Fixed money always pools to start to it is done from there.
In addition, more money is always required due to advancement. This not only included population growth, which has been the standard globally but also economies. To fund $100 trillion requires a lot more in global trade than what was needed when it was $10 trillion.
The other feature is technology. This also creates a complete change in the monetary requirements because it is deflationary.
This was never going to be announced as they said so a few months back that they are not ready and most likely as you suggested China and India have been pushing for something that benefits them more than others. These are all bad egg countries and thinking that they are going to help each other working as one happy family this is not going to happen.
Well even the greatest of enemies can align when it is to their benefit.
However, we are dealing with deep seeded issues that goes back hundreds of years. China is the big fish now but they are wobbling. They could recover since they do have a lot of advantages.
India also has a lot going for it but is starting far back. I believe they will make strides but it will take decades to become a major player.
The others are also rans, kind of like Canada. Nice to add to the story but not a huge player.
It s amazing to think how enemies can still be friends as long as their is benefits. I am wondering what happens if the government changes and they don't like BRICS in SA's case this may happen if the opposition gets in next year. Big if mind you, but a possibility.
So everything we try to build or achieve will have a form of inflation when the supply is too high. India and China don't like each other as the territory incident that happened in 2020. Also, China would like to have part of Siberia, we are not in a perfect world...
You are dealing with entities that have not liked each other for centuries.
And now they added more to the mix.
The Saudis and Iranians? Really? Yeah that guarantees non-agreement.
That is about the outcome of the BRICS summit.