If the Hindu Business Line’s source is correct, then the next summit will reaffirm its members’ voluntary right to de-dollarize their trade with each other (thus not obligating them to be drawn into the yuan’s orbit) and possibly make progress on a BRICS currency basket.
The simplest solution would be to peg the “BRICK” :) to gold for accounting and contract purposes. It could in fact remain a notional currency, and time and innovation would show if an actual means of exchange is desirable. So it does not need to be launched immediately as means of exchange.
For the purposes of settlement and payment any currency or means (including goods) could be used to the assigned BRICK value. Contract can be used to limit the means of settlement to the currency of choice etc. but that would be then an agreement between the individual parties. This would provide for maximum flexibility and market freedom which is important for most countries, and would avoid any one country becoming the new financial hegemon.
We now know that the US dollar dominance in international trade allowed USA to become a military hegemonic power, a clearly undesirable outcome. Let us not repeat bad history, but build a truly free market for the world!
Would it be fair to say, that while everyone shares an interest in de-dolarization, nobody, except perhaps the Chinese, are interested setting up the Yuan as the new dollar?
Yuan should NOT become the de facto currency for BRICS for multiple reasons. (1) China new has high inflation in food sources (not just grains) and raw materials. (2) One of the major reason for BRICS to band together is to do without USD hegemony. Why do they want to create a new hegemony ? Trades between BRICS should always be voluntary in currency arrangement. (3) How to create a composite non-tradeable pricing unit, it is mechanical for the rest. The main difficulty is the "face" of these nations.
I do see one problem in using the concept of basket of sovereign currencies. To really stand up for the global south and attract more countries to follow suits and join the BRICS style of trading, the pricing unit has to be commodity based. If only commodities are used, then service and products oriented economy like China and India would feel exploited. Yet if only fiat currencies are used, that does not play fair with the resource producers. I hope commodities would be added into basket. If you owe me 100 BRICKs and 3% is oil, then 3 barrels of oil must be part of the settlement. China and India should not complain, because no matter how hard the people work or how nice the designs are, labor cannot produce oil crude.
Other countries should do what is in their best interests…but it’s pretty crazy how strong a position America is in considering our weakest point was 2008 as Bush inexplicably attempted to destroy America while making China great again?!? Putin should note that Bush wouldn’t admit mistakes and it made America weaker and it was Trump that surrendered to the Taliban and it made America stronger!
So what do I do if I'm outside the country and can't reach an Indian bank in time?
"Black money and corruption are the biggest obstacles in eradicating poverty," Mr Modi said.
From the guy who, if rumours are true, wanted to scrap the scheduled castes, which is a big part of why BJP showed so poorly in the recent elections. The idea that Modi wants to eliminate poverty is absurd on its face. China began its economic rise on the backs of cheap labour, following the examples of Japan and Korea. Like Japan and Korea, they stayed true to their goal of lifting the nation out of poverty, which they've largely succeeded in doing, and which by its nature requires rising wages and an accompanying move up the value chain in their exports, also largely achieved. Chinese goods are well made these days IF you're willing to pay a fair price. Go shop for clothes in Japan and you'll see. First rate threads, made in China. No Sam Walmarts in Japan.
Modi and his gang have no such plans for India. India ruthlessly exploits its working poor, and the ruling class intends to keep it that way. In that regard they are following the British model, not Japan Korea or China. It's made all the easier by their persistent caste system, which although banned in 1948, continues to exist as an embedded cultural feature crippling their social development.
There's a reason when you call customer service you end up talking to Steve from Nebraska in New Delhi. Wages. Ask yourself why your call doesn't end up in China. They speak better English and are generally sharper than Indians.
I can understand the expedience of forming an alliance to counter western imperialism, but if that alliance includes nations as corrupt as India, Brazil and South Africa, then I can't see it ever getting off the ground as a major tour de force in international finance. Who would trust them?
Russia and China both have the means to settle accounts outside the dollar system. Russia can pay in oil or gold, China in quality manufactured goods. Why do they even need Brazil or India? Let them dig themselves out of their own self-inflicted poverty. How is it Russia's or China's job to do that for them?
I have confidence in both China and Russia's ability to go it on their own, especially since they seem to be moving toward mutual support both financially and diplomatically. Adding all these new members without any real plan as to how you'd achieve 'multipolarity' with smaller nations that lack the resources of either two seems like an exercise in futility. They'll never be equal partners, so why go on pretending? By all means, assist them through the usual channels of foreign aid and investment, which is how you win friends internationally, but sharing a common currency? Not going to happen. If they want to peg to the dollar, that's their choice. If they want to peg to the Yuan or Rubble, same thing. That's what the currency markets are for - to keep the excesses of corrupt ruling class money printing in check. Works pretty well already. No need to reinvent the wheel.
What’s needed is another currency though. Governments and big transnational corporations will always manage. Whether through “baskets” of currencies or trading rubles for real.
But what about all the smaller corporations and producers? Let alone consumers? That’s where a BRICS currency could really be helpful.
The simplest solution would be to peg the “BRICK” :) to gold for accounting and contract purposes. It could in fact remain a notional currency, and time and innovation would show if an actual means of exchange is desirable. So it does not need to be launched immediately as means of exchange.
For the purposes of settlement and payment any currency or means (including goods) could be used to the assigned BRICK value. Contract can be used to limit the means of settlement to the currency of choice etc. but that would be then an agreement between the individual parties. This would provide for maximum flexibility and market freedom which is important for most countries, and would avoid any one country becoming the new financial hegemon.
We now know that the US dollar dominance in international trade allowed USA to become a military hegemonic power, a clearly undesirable outcome. Let us not repeat bad history, but build a truly free market for the world!
Would it be fair to say, that while everyone shares an interest in de-dolarization, nobody, except perhaps the Chinese, are interested setting up the Yuan as the new dollar?
It would not - The CPP has no intention that the yuan become the new dollar, and all that that entails
The CPP has embraced mulipolarity, and is largely responsible with the other BRICS members for realising this resurgence
Why and how would they invert or subvert this
Yuan should NOT become the de facto currency for BRICS for multiple reasons. (1) China new has high inflation in food sources (not just grains) and raw materials. (2) One of the major reason for BRICS to band together is to do without USD hegemony. Why do they want to create a new hegemony ? Trades between BRICS should always be voluntary in currency arrangement. (3) How to create a composite non-tradeable pricing unit, it is mechanical for the rest. The main difficulty is the "face" of these nations.
I do see one problem in using the concept of basket of sovereign currencies. To really stand up for the global south and attract more countries to follow suits and join the BRICS style of trading, the pricing unit has to be commodity based. If only commodities are used, then service and products oriented economy like China and India would feel exploited. Yet if only fiat currencies are used, that does not play fair with the resource producers. I hope commodities would be added into basket. If you owe me 100 BRICKs and 3% is oil, then 3 barrels of oil must be part of the settlement. China and India should not complain, because no matter how hard the people work or how nice the designs are, labor cannot produce oil crude.
Other countries should do what is in their best interests…but it’s pretty crazy how strong a position America is in considering our weakest point was 2008 as Bush inexplicably attempted to destroy America while making China great again?!? Putin should note that Bush wouldn’t admit mistakes and it made America weaker and it was Trump that surrendered to the Taliban and it made America stronger!
Exchange rates should be like dollar to euro exchange rate and should not be like dollar to rupee
Would you trust a government that does this?
https://www.bbc.com/news/business-37906742
or this?
https://www.euronews.com/business/2023/09/25/indians-have-just-a-few-days-to-return-billions-in-banknotes
So what do I do if I'm outside the country and can't reach an Indian bank in time?
"Black money and corruption are the biggest obstacles in eradicating poverty," Mr Modi said.
From the guy who, if rumours are true, wanted to scrap the scheduled castes, which is a big part of why BJP showed so poorly in the recent elections. The idea that Modi wants to eliminate poverty is absurd on its face. China began its economic rise on the backs of cheap labour, following the examples of Japan and Korea. Like Japan and Korea, they stayed true to their goal of lifting the nation out of poverty, which they've largely succeeded in doing, and which by its nature requires rising wages and an accompanying move up the value chain in their exports, also largely achieved. Chinese goods are well made these days IF you're willing to pay a fair price. Go shop for clothes in Japan and you'll see. First rate threads, made in China. No Sam Walmarts in Japan.
Modi and his gang have no such plans for India. India ruthlessly exploits its working poor, and the ruling class intends to keep it that way. In that regard they are following the British model, not Japan Korea or China. It's made all the easier by their persistent caste system, which although banned in 1948, continues to exist as an embedded cultural feature crippling their social development.
https://www.ohchr.org/en/stories/2021/04/dalit-born-life-discrimination-and-stigma
There's a reason when you call customer service you end up talking to Steve from Nebraska in New Delhi. Wages. Ask yourself why your call doesn't end up in China. They speak better English and are generally sharper than Indians.
I can understand the expedience of forming an alliance to counter western imperialism, but if that alliance includes nations as corrupt as India, Brazil and South Africa, then I can't see it ever getting off the ground as a major tour de force in international finance. Who would trust them?
Russia and China both have the means to settle accounts outside the dollar system. Russia can pay in oil or gold, China in quality manufactured goods. Why do they even need Brazil or India? Let them dig themselves out of their own self-inflicted poverty. How is it Russia's or China's job to do that for them?
I have confidence in both China and Russia's ability to go it on their own, especially since they seem to be moving toward mutual support both financially and diplomatically. Adding all these new members without any real plan as to how you'd achieve 'multipolarity' with smaller nations that lack the resources of either two seems like an exercise in futility. They'll never be equal partners, so why go on pretending? By all means, assist them through the usual channels of foreign aid and investment, which is how you win friends internationally, but sharing a common currency? Not going to happen. If they want to peg to the dollar, that's their choice. If they want to peg to the Yuan or Rubble, same thing. That's what the currency markets are for - to keep the excesses of corrupt ruling class money printing in check. Works pretty well already. No need to reinvent the wheel.
"...perhaps also the euro..."
What, you mean the euro isn't the same as, or part of, the dollar?
What’s needed is another currency though. Governments and big transnational corporations will always manage. Whether through “baskets” of currencies or trading rubles for real.
But what about all the smaller corporations and producers? Let alone consumers? That’s where a BRICS currency could really be helpful.