A new world reserve currency

Investment Analysis Clubs Macro Economic Trends and Risks
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The dollar’s days look numbered. The USA will have to share a place at the top table very soon:

Russia is ready to develop a new global reserve currency alongside China and other BRICS nations, in a potential challenge to the dominance of the US dollar.

President Vladimir Putin signaled the new reserve currency would be based on a basket of currencies from the group’s members: Brazil, Russia, India, China, and South Africa.

https://www.youtube.com/watch?v=4XEpyaL2npw

Meanwhile Western governments are trying to “burn off” their debt with inflation rendering their own currencies worthless. I’m still buying gold!

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President Vladimir Putin signaled the new reserve currency would be based on a basket of currencies from the group’s members: Brazil, Russia, India, China, and South Africa.

What’s with the South Africa thing? It has a GDP that is less than half of Illinois.

DB2

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I love how every time someone in the world wants alternates to the U.S dollar - they need multiple countries to. combine in order to do it. Brazil Russia, India, China, South Africa. Yeah, there’s a collection of actors that I really really want to be the reserve currency versus America. Bolsanaro, Putin, Modi, XI, and whomever is in charge in South Africa. The world will sleep better at night with that group of laureates at the helm.

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I’m still buying gold!

If I had gold I’d sell it to you but I already sold all my gold over two decades ago.

Sorry!

The Captain

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The challenge is that, while the US dollar is beyond the control of other nations, its management, the Federal Reserve Bank, attempts to be transparent and can be easily followed by its counterparties.

OTOH, other than China, whose currency management is well defined, the other countries regularly wrestle with the extremes of inflation. While a currency bask is what it is, having a volatile bucket makes things hard to predict.

I suspect that while there will be nods to SA, B and I and a bit more presence by R, if the pot will be GDP based, China will be in control.

Jeff

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I keep some solid gold and silver.

And i’l never ever ever understand what good it will do me.

If there’s a collapse - I’ll wish I had learned gardening and marksmanship because my gold - literally can’t be used for toilet paper.

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Thank you for recommending this post to our Best of feature.

I’m still buying gold!

And people told me I was wasting money when I bought gold coins!

Desert (What’s “paranoia” and why did Webster hide it so far back in his book?) Dave

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What’s with the South Africa thing?

Africa in general has a sheet-ton of natural resources, and SA is generally the most stable/reliable partner on the continent.

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What’s with the South Africa thing? It has a GDP that is less than half of Illinois.

DB2

I guess part of the fantasy is to back it up with gold.

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This idea comes from Vladimir Putin. Who is willing to go along with him these days? That’s like going along with Adolf Hitler! Hmmmmm, I wonder Putin’s proposed basket of currencies includes the Russian ruble, which is known for being one of the most unstable of all. :slight_smile:

The countries in this BRICS group are all considered developing countries. While a basket of currencies is less volatile than any single currency due to the diversification, wouldn’t the currencies of developed countries be more suitable for a reserve currency?

What’s stopping the currencies of developed countries from replacing or supplementing the US dollar as a reserve currency? How about the Euro, British pound, Swiss franc, Canadian dollar, Australian dollar, New Zealand dollar, Norwegian krone, Swedish krona, Danish krone, Singapore dollar, Hong Kong dollar, South Korean won, and Japanese yen?

And what’s the objection to using a basket of currencies as a reserve currency instead of just one currency? One of the most important principles of investing is diversification. Don’t put all your eggs in one basket. So why can’t the reserve currency be a group of developed country currencies? This group of currencies would be more stable than any individual currency.

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This idea comes from Vladimir Putin.

I don’t think that it was just Putin who thought this up, it’s an idea that has been kicked around for some time. The actions of the USA following the Ukraine war have accelerated the idea.

Who is willing to go along with him these days?

Countries that the USA is waging economic warfare against. The USA has done more than anyone to push for an alternative world reserve currency. Also countries like China who are looking to replace the USA on the world stage, so they will be keen to undermine the dollar’s strength.

That’s like going along with Adolf Hitler! Hmmmmm, I wonder Putin’s proposed basket of currencies includes the Russian ruble, which is known for being one of the most unstable of all. :slight_smile:

The Ruble is one of the stronger currencies the world has at the moment:

Russia’s Ruble is the strongest currency in the world this year

https://www.msn.com/en-us/money/markets/russias-ruble-is-the…

The USA dollar has recently rallied but this is (I suspect) a result of the Japanese going for massive QE and throwing the yen under the bus.

The countries in this BRICS group are all considered developing countries. While a basket of currencies is less volatile than any single currency due to the diversification, wouldn’t the currencies of developed countries be more suitable for a reserve currency?

In effect most ‘developed’ world countries are tied closely to the dollar and suffer many of the economic problems of the USA - runaway inflation, slow growth and mountains of unpayable debt.

And what’s the objection to using a basket of currencies as a reserve currency instead of just one currency?

It will stop another dollar empire which has given the USA so many advantages at the expense of others. It should also help stop the weaponizing of a currency. I’m all for competition and currencies are like anything else, if you have a monopoly you will misuse it.

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President Vladimir Putin signaled the new reserve currency would be based on a basket of currencies from the group’s members: Brazil, Russia, India, China, and South Africa.

Nothing says stability and transparency like Brazil, Russia, India, China, and South Africa.

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Africa in general has a sheet-ton of natural resources,

Natural resources are just dirt in the ground until you extract, refine, and process them into feedstock to some industrial process.

and SA is generally the most stable/reliable partner on the continent.

and the winner is…

whoever gets the mineral rights to the natural resources.

How rich is cobalt rich Congo?

How rich is oil rich Venezuela?

The Captain

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As much as the Captain hates “socialistic” pseudo-moralities I hate and furthermore DETEST “free market” pseudo-moralities, but nevertheless I constantly rec his posts and agree with him. We have hatred of “pseudo” morality in common, and understand that mineral and other potential wealths are poisonous without a functioning political culture rooted in reality and ethics. Looking, searching, not finding…

Them Norwegians can coque their humane and green righteousness, but the main difference between their fund and Exxon is smarter long term PR.

david fb
(I used “cogue” instead of normal english to escape the moronic harrassed 8th grad teacher censorship of the word for a male chicken in English)

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President Vladimir Putin signaled the new reserve currency would be based on a basket of currencies from the group’s members: Brazil, Russia, India, China, and South Africa.

You would have to help me understand the FUD you put out. You have two emerging markets that are Brazil and India lacking the structure, you have an evil empire of Russia, you have China that does not play by the rules, and you have South Africa that is 3rd world and operated by guerilla gangs. I am sure the world will trust their new developed currency…

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