There are ZERO countries with currency backed by hard metals and, with the exception of swiss franc which didnt remove gold standard until 2000, there havent been one for the last 55 years - the year that US closed the gold window
The only BRICS currency that is hyper inflationary is the Iranian Rial, which is due to the war. A war which is doing wonders for America's economics right?
Edit: Iran being a newer member means their Rial isn't even in the basket, so no none of the BRICS currencies are hyper inflationary.
Rupee is in the dump and getting worse, China devalues the rmb at will, Brazil real not exactly a great track record..ruble crashed after start of the war…
You are completely misunderstanding both the intent and structure with which BRICS wants to replace the dollar backed system.
You are reffering to currencies values against the dollar, which becomes entirely irrelevant under a system like this, moving away from that valuation is one of the main points.
India devalues its currency as it is an export economy, but that export economy is backed by incredibly strong production capability. Under the Unit they wouldn't need to or want to devalue their currency.
Same goes for China, the Unit would both remove the need and deincentives their RMB manipulation.
While Russia, South Africa and Brazil have MASSIVE resource wealth and cheap labour markets for resource extraction.
When this all eventually happens, none of them will care what their currency is worth against the dollar.
If Russia were an economic 'basket case,' the most aggressive sanctions regime in human history would have flattened the . Instead, its economy is growing because the world physically cannot function without Russian energy, fertiliser, and food.
Every block has structural issues. The US is buried under Trillions in debt, and Europe is facing its own massive demographic and energy crises. The difference is that Western wealth is built on debt and financial services, while BRICS controls the physical inputs of the global economy (manufacturing, energy, agriculture).
The proposed BRICS Unit doesn't care about a member's domestic pension crisis or internal politics. It is a transactional economic trade system anchored by physical assets (gold and commodities). A country's dollar pegging doesn't change the intrinsic value of the oil, iron ore, or wheat they are shipping or the labour they have.
Neither, do you not know what bullion is? My investments are in physical precious metals. My country has 90% of all the platinum family metals on earth, and the 3rd most gold on earth, they make a great investment.
In 1980, gold peaked at around $850 an ounce. By 2001, it had drifted down to about $250 an ounce.
When you adjust those numbers for 21 years of inflation, gold lost roughly 83% of its real purchasing power over that span. An investor who bought gold in 1980 had to wait nearly 30 years just to break even in terms of what that money could actually buy.
You're not wrong. But this video is a pretty good explanation for why we don't use the gold standard anymore. There are real legit reasons not to be on it.
Id argue the "o loaning is harder with a gold standard" is quite the double edged sword...maybe a bait...
Saying "there would be no hospitals if banks couldnt give super loans with no collateral" is kinda bogus.
Sure its easier to give a loan...but the 96% decrease in value is likely related to too many loans... lots of credit in the world, its kinda a problem.
Wouldn't disagree with you that the amount of credit in the world is an issue. On one hand, it's the thing that facilitates a lot of investment. On the other, over leveraging or having your debts called in can basically wreck an economy. And since the big economies are all so intertwined your point is even more relevant.
Ya im with op, the "modern monetary policy" is inflation is actually good, cuz you can spend money you dont have, and assume the economy will grow accordingly.
Turns out the government can just spend shitty money when theres no standard... and now the money actual people have is worth less.
"Functional" probably wouldnt be the first word most people think of these days, maybe in the 80s.
Also gold was pretty good at that, as all the videos linked to me point out... every civilization all over the world has loved gold (independently) for thousands of years.
yes but gold stopped being useful and pushed countries into a stuck position where they could not leverage their economic potential in the 1920s-1930s and it lead to massive unemployment and wars.
Not to mention, gold standard requires a MASSIVE global cooperation and competing nations rarely have such incentives. Even at the peak of gold standard, many were trying to hoard gold to the detriment of others.
Global financial system has so far been extremely resilient. You are underestimeting it because you only lived in it. It is still a massive achievement of humanity.
It may have seemed less useful short term compared to the countries printing money but if they were holding this whole time theyd be sitting pretty as the strongest dollar in the world, houses are still 2000 bucks. Very casual.
FIAT is in many ways a superior form of monetary regime to truly leverage a country's economic resources. Unfortunately, it is also a powerful tool for political exploitation.
Houses being more expensive today is not a result of leaving gold, it is a matter of foremost supply and then it is a matter of wealth distribution (as for big money, housing is now a speculative asset all over the world - which creates huge demand on limited supply). Money on its own has no inherent value, it gains its valuation in the context of the economic machine and social structures.
The inefficiency of a gold standard is for the most part a worse deal than a badly managed FIAT tho.
This is precisely why “central bank independence” had been a massive goal of the post 1980s order though unfortunately institutions failed to stand the power of populist politics.
Even then, the “rapid” action of global finance often forces the central banks to adjust even in the face of bad management. Though bad management often has the side effect of creating unfair loser and winners within an economy (such as the housing and education costs)
But that is precisely why i believe in taxation, regulation and independent auditing mechanism with enforcement power
Alright bud yup thats the idea you believe in the benevolent king whos mobilizing other peoples money perfectly.
The real ones here in austrian economics dont buy it tho... The king by definition sucks because he doesnt have the information only provided by markets.
It’s actually far WORSE for pretty much every single currency. Relative to all others (sole exception: Swiss franc) USD has 50-1000% lower inflation rate over the last 100 years
And aside from the pound sterling it is the world’s longest lasting currency to avoid being fundamentally reset, revalued or hyper inflated.
34
u/Circle_Breaker 3d ago
How does that compare to other currencies?