Not a great comment by Trump IMO. Likely just using it for negotiations though as I doubt be follows through with the tariffs. Better to get the US debt situation under control and tell other countries we won't weaponize the US dollar like Biden did against Russia. I think the BRICS proceed with their new currency regardless of what happens so they have it ready if they need it.
I like how the article goes to the council on foreign relations for a quote. Nasty pieces of work they are. It's just your typical lazy TDS drivel complaining about tweets and saying what is or is not "realistic" without the slightest attempt to back it up. Spend 3 minutes thinking about how a BRICS currency would need to work. It's like claiming peace is going to break out in the middle east without describing how.
The point of a common currency backed by gold is not to become friends and hold pinkies at the park. They are seeing the US backing their militar actions with dollars created out of thin air. Since they abandoned the gold standard they can see that countries cannot be audited. No one can audit the dollar. If they let the US continue with their foreign politics, eventually the Americans will run out of conflicts to battle, and BRICS countries will be next to become a target. The US is running away from its debt by starting wars all over the world every year. They are starting a common currency to stop the US to do whatever they want. They are not planning to do it, they have to do it. They have to stop the free printing dollars machine. Europe is also trying to go back to gold standards, if BRICS members and Europeans are able to change the way international transactions work, and they complete a a de-dollarization of the economy, they will stop the US militar dominance.
Again, a return to a gold standard is impossible. That's why it was abandoned. The U.S. fiat dollar, as do other fiat currencies, trades freely on an international market. To stabilize the dollar the U.S. Central Bank can intervene in forex markets, and even do so virtually without limit so long as Congress authorizes it. Neither the Fed, nor Congress (which is the only body of the U.S. government Constitutionally authorized to create money) can any longer stabilize the price of gold; hence a gold standard for currency is untenable; not just for the U.S., but for any nation. Were any nation capable of cornering the Gold market, a return to the gold standard for that nation's currency would be possible, but why would any nation want to do that when fiat money is more practical, far more flexible, and much less cumbersome? Nations on a gold standard must obtain gold to back their currency. They do this by printing legal tender gold certificates, which are convertible to gold and are used by the sovereign to purchase gold. Hence both fiat and gold standard money has its origin in "printing out of thin air". At one time, it was possible for any nation, or consortium of nations, that could dominate the gold market to tie their currencies to gold. This of course is no longer possible. The U.S. dollar is backed by U.S. productivity, the governments power to tax, and the full faith and credit of the American Government. Everything in our World is subject to change of course, with the exception of the fundamental, natural, physical laws. I understand that there will always be people proposing a return to the gold standard, because there will always be people who do not understand money.
From your point of view, economists that run countries in the BRICS block don't understand money. And of course you do. https://www.britannica.com/procon/gold-standard-debate Going back to the gold standard is not only possible, it is going to happen. Since I am not expecting you to read anything, look the cons in that chart. - A gold standard would limit the Federal Reserve to manipulate recessions. About fucking time. - It would restrict the ability to finance national defense (US). No wonder why BRICS members want to go back to it. They are not the ones that are starting a war every two years, unlike the US. And now look at the pros. Everything that is a con is a negative point to the US. But BRICS want exactly the opposite. In that chart, if you we look at it from the BRICS point of view there are way more positive points than negative. We can tell that whoever wrote this article wanted to lay it out from the US point of view. But there it is.
Exactly. If they did understand it, they certainly would not be proposing a return to the Gold Standard! In fairness to economists, it is mostly politicians that are proposing a return to gold. Many American Economists don't understand money either. Money is a specialist field of economics. The only ones that understand it fully and in detail are those few economists specializing in money. Note the chapters on money and banking in basic Economics texts are nearly all incorrect when it comes to describing the so-called "Money Multiplier". New texts are starting to come out were this has been corrected. You and I were taught by our parents and politicians that our government raises taxes in order to have money to spend, and when the government wants to speed more than its revenues, it borrows the extra money it needs from the private sectors. This was essentially true at least for a period of time if you go back far enough, because government thought it was true and acted accordingly. It is not true today however. This prior thinking fails to take into account an elemental fact, viz., government is the source of all our money via deficit spending. Without deficits we would have no money at all in the economy. It is a sobering thought and one quite hard to wrap ones head around, at least initially --- just as it was hard for people and the Church!!! to except that the Earth was round and not flat as they had been taught. You are right if you have observed that many older economists today simply do not understand modern money. Fortunately that is changing and fairly rapidly. Even old folks like Yellen and Bernanke are starting to get a clue. When I read Bernanke's book that was obvious. In the U.S., L. Randall Wray, a Minsky protégé, is, I would say, the chief protagonist among the MMT economists. His masterful 1991 monograph, "Understanding Modern Money", caused quite a stir! The real pioneers, however, are people like Knapp and Lerner. It's taken a century for us to realize that although when J.P. Morgan said, "Only Gold is money", he might have been right. But if one were to say this today, it would be wrong. One observation that I believe escapes nearly everyone, even today, is that both gold standard money and modern fiat money have their origin in "printing". Suggested Reading. Anything by L. Randall Wray, William Mitchell, Warren Mosler, or Stephanie Kelton (a former Senate economist, and now an academic one) The latter has an inexpensive paperback out that is a very easy read, even for someone without any economics background.. It's called "The Deficit Myth". All those folks I mentioned have Websites or blogs and an extensive You Tube presence. P.S.: Your "PRO 3" above is wrong. Under the Gold Standard, the government prints gold certificates and uses them to buy gold. The Gold has to come from somewhere. The gold standard is tied to printing just as fiat money is! But the gold standard is hopelessly cumbersome and unsustainable in today's world. We don't need a gold standard to give our money value. It gets its value from the governments ability to tax and accept only the money it "prints" in payment. (No Bitcoin please.) Other things that back our money's value include U.S. productivity and the full faith and credit of the U.S. government.
In my response to Drawdown Addict above, there are a few errors for which I apologize. I have put the corrections in brackets. in line 5/ "New texts are starting to come out [where] this has been corrected." in line 7/ "You and I were taught by our parents and politicians that our government raises taxes in order to have money to spend, and when the government wants to [spend] more than its revenues, it borrows the extra money it needs from the private [sector]."
With the euro, none of eastern europe uses it, Sweden refused to use it, UK refused to use it, Norway doesnt use it, Swiss refused to use it. Back when the euro was developed, Spain, Greece, Portugal and Italy (PIGS) had horrible currencies, corrupt and never paid back debt. They begged for a unified euro. The idea was to pull the poor ones UP to the LEVEL of a mean or median. Even france's currency was of very low worth back then. The only real currency the euro was based was the Deutsche Mark and the closely related but very small Danish and Dutch currencies. For Brics..it would be very very easy to replicate this..using China in place of the Deutsche Mark, Russia in place of the French franc and the dutch/danish currencies. Brazil now would be far better than spain or italian currency back then. India becomes the lower example (similar to Greece) which gets pulled upward. The newest members of BRICS would obviously be similar to eastern europe and would not be converted to the BRICS currency for a while. The BRICS would look at Turkey's adoption the same way europe looks at Turkey. Turkey may settle in a BRICS currency, but Turkey would never be in BRICS. Saudi would also settle in the Brics currency when selling oil anywhere toward the east (but would never be in BRICS). Argentina has gone bankrupt so many times, I dont think even the BRICS wants them. However..I dont think they want to just follow the EURO model. I think they are looking at including gold as a fair size percentage of the basket when the currency is formed. All of the BRICS countries either already hold large amounts of gold or they mine and produce large amounts of gold or oil (reserves).So..its much more possible for Brics to do this than it might have been for europe to do it back then. So, in this way it is very different from the EURO model. When you look at the lower level BRICS members..think of them as PIGS. PIGS went bankrupt many times before and also some few years after the EURO was formed. The Baltic states also went bankrupt in 2009..shortly after they joined the EU. Germany, as a powerhouse, was able to unify europe's finances and ''BAIL OUT'' both PIGS and Baltics in 2010-2011. China is looking to take this role in Asia and the Global South. Yes, India is on the very low end of the BRICS as a currency. However, India will offer BRICS something that europe and USA will no longer ever have...a continuous supply of large population based Cheap manufacturing labor (and also Indonesia in this regard). India will allow BRICS to escape the labor cost inflation that is growing and growing and growing in the West. If you noticed..I never mentioned USA as a model...just as europe never looked at USA as a model for the EURO. USA is a completely different continent...different model...different situation. USA will always be far away from both Europe and Asia..in most all ways.
Hahaha! Are you kidding me? The EU is even more addicted to deficit spending and social welfare programs than the US. You think they're going to shut all that down? I'd rate the chances that the EU starts paying Russia for their natural gas in gold bars at slightly less than the chances of my being declared god king of all Persia. It's hard to overstate how stupid that move would be. How many operating gold mines do they have? So they're going pay for energy they don't have with gold they have to import? Ooh, maybe they can pay for it with their shrinking industrial base! https://wattsupwiththat.com/2024/02/12/the-deindustrialization-of-europe-in-five-charts/ Certainly more than you. Spend five minutes thinking through the actual mechanics of your BRICs currency backed by gold. Where is this gold coming from? Who holds it? How do I redeem BRICS currency for gold? Can I get it in a safe jurisdiction where I can avoid being arrested for criticism of dear leader? What's to stop one BRICS member from lying about how much gold they have and printing extra notes? Or double promising the same pile of gold by listing it on other exchanges? It's not like major precious metals fraud hasn't happened in these countries. https://conservative-headlines.org/...cked-by-massive-china-counterfeiting-scandal/ https://finance.yahoo.com/news/kingold-jewelry-secures-us-2-093000201.html Then you have the whole issue that switching to a gold backed currency would constrain these countries even more than the US. And of course dictatorships love constraints on their power and are totally willing to accept them for the common good. That's why they're dictators right? Then there's also the issue of fractional reserve banking. A country with a gold backed currency has to shut that down. You can allow a bank to take a note that you just created corresponding to 1 share of gold and turn around and loan it out 5 times over. The people getting paid from the loans could covert them to gold and would wipe out your treasury. So you would see a massive contraction in available money supply, tied with a spike in interest rates. I'm not surprised they're making noise about an alternative currency. It's good negotiating leverage. Actually implementing it in a way that people other than those trapped inside those countries will want to use it is another issue entirely. If the actually make something, expect it to be an SDR against a basket of bonds. Any good will be just for show and there will be no meaningful way the exchange bills for physical gold. You need to work on your reading comprehension. The subtitle or the article you linked is "Should the United States Return to a Gold Standard?". It's not about a gold backed BRICS currency at all.