BRICS - Sergey Glazyev

An interesting paper by Russian economist Sergey Glazyev on the new BRICS currency.

This is the interesting bit – any country that joins BRICS will be free to default on loans from Western financial institutions which they presumably will not need anymore:

Transition to the new world economic order will likely be accompanied by systematic refusal to honor obligations in dollars, euro, pound, and yen. In this respect, it will be no different from the example set by the countries issuing these currencies who thought it appropriate to steal foreign exchange reserves of Iraq, Iran, Venezuela, Afghanistan, and Russia to the tune of trillions of dollars. Since the U.S., Britain, EU, and Japan refused to honor their obligations and confiscated the wealth of other nations which was held in their currencies, why should other countries be obliged to pay them back and to service their loans?

I’m trying to work though what this default would mean. Would this include the World Bank for example? Please post any links on this.

There is an important BRICS meeting at the end of August 2023 which will be interesting!


Russia in affect was already free to default on the loans as in not pay them back. In fact Russia had little to no choice. Of course that shows incredible economic power…I can hear Send in the Clowns playing in my head. There will always be clowns.

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Have they decided to move it so Putin can attend without being arrested?

I thought this part of the article was interesting:

Currently, the U.S. is fighting to maintain its dominance, but just as Britain previously, which provoked two world wars…

Interesting education system they have in Russia.


Default leads to hyper inflation in Russia. The need to run the government and fuel and man the army mean printing massive numbers of Rubles. Or the army can march back to Moscow to get paid. Eventually the currency is so worthless the men do march back in rags and demand more than pay.

The World Bank and IMF wont touch Russia at all. The two are US/EU and EU/US. Japan and Canada perhaps AU thrown in the mix of funding. SK and NZ will be rounding out the group at some point.

Glazyev was suggesting that countries should default on debt denominated in USD. There is no reason to think that would cause hyperinflation in Russia.

But there is also no reason to think individual countries would be motivated to do that. If countries default on their USD debts there is no plan B. Russia’s economy is crippled. China doesn’t allow access to its financial markets. There are no other options. Even BRICS uses Wall Street banks to finance its lending. If the global south starts defaulting on debts that source of funding goes away, which means BRICS goes away.

I can’t imagine the BRICS leaders are that stupid, but maybe they are. We’ll see in August. But I’ll bet a steak dinner we won’t see a BRICS currency then.

I agree with that. I suspect that there will be some announcement of future intent.

However, I’m surprised at how the BRICS bankwagon is gathering momentum.

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An IBM sales rep in Caracas, Argentinian by nationality, believed in the Cuban Revolution so off he went to work with Che Guevara. He soon became disillusioned and left Cuba. He had some wonderful stories about working with El Ché. Asked how he had become the Economics Minister, Che replied, “Fidel asked if there were any economists in the group, I heard ‘communist’ so I raised my hand.”

If you willfully default on US dollar debt what are the chances that you can buy goods that are priced in US dollars? De facto currencies work in informal markets like cigarettes in jails and marbles among kids but not in the global market. In addition to faith, money needs the backing of value. The money Sergey Glazyev proposes has neither.

The Captain


Any country that got out of the dollar system and relied on BRICs would be making a big mistake, at least until the BRICS system had been tried and tested.

BRICS would bring a bit of competition to the system and stop the USA from its bullying of the world by using the dollar as a weapon.

However, I am interested in what would happen if his proposals were put into practice, as one day, in the distant future, they might be.

BRICS is moving faster than I ever imagined it would, so who knows?


The practical thing to do is to find ways to make the system work for you. Defanging Uncle Sam is wishful thinking.

The Captain

Easy, be like the UK and do everything that the USA tells you to do :slight_smile:


Turkey already is facing hyper inflation. Yes Erdogan is that much of an ejit.

Lula and Modi are the better people in the group.

Xi has problems we can not contemplate they are so massive. We can contemplate it really but you will say they are too far flung. Xi’s system is more closed but he needs the outside world’s resources and China can not cope longer term.

Russia is now imploding. The central bank’s assets are running completely dry. The bank has to print to fund the army. Yes it will lead to hyper inflation.

When a leader is not legitimate (in Aristotle’s definition) the country’s economy is at a complete loss eventually. That does not included Brazil or India.

Turkey’s central bank has also flushed all of its assets to prop up the lira and get Erdogan re-elected. Turkey and Russia are about to complete fail economically. Russia can no longer finance the war in Ukraine.

Your comments are not looking at the individual facts of each of the BRICS nations and then applying economic theory in public finance. You can not generalize that a failing economy with no assets in the central bank will not have hyper inflation.

BTW we are all that stupid. No one person should run an entire nation by command. Individually as human beings we are not all knowing. The stupidity is going to show up when one man runs the entire show. Yes ounce for ounce Putin, Xi and Erdogan are complete ejits. In fact over time the ejit factor gets multiplied.


We do not bully our fellow democracies. Be careful who we do not bully!



Maybe you were here in the 1800s but I wasn’t.

I did qualify democracies. Yeah there were fleeting moments of democracies and a mistake in the 1950s with Iran.

It gets more interesting as India is having second thoughts about a BRICS currency:

India has shut down speculation in recent weeks that the BRICS nations were planning a common currency to derisk their economies from the kind of devastating sanctions that the United States has levied on Russia and other countries by leveraging the greenback’s global dominance.

Strange as I would have thought it possible to be in both payments/currency systems (when they sort out what they are doing that is).

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I doubt they had first thoughts. A common currency requires giving up political control over your own money. For example, you can’t cut interest rates if the economy slows, and vice versa. A common currency is really only beneficial if you trade a lot with each other because it reduces the currency risk. But the BRICS don’t trade all that much with each other. So lots of downsides and not much upside.


India’s Unified Payment System TAM now includes France.
Palki Sharma explains that France is the gateway to UPI gaining acceptance in EU.


The national flag of India, colloquially called Tiraṅgā (the tricolour), is a horizontal rectangular tricolour flag, the colours being of India saffron, white and India green; with the Ashoka Chakra, a 24-spoke wheel, in navy blue at its centre.[1][2]

I think that the idea was that no one would be in control, that was the attraction.

For example, we used to have gold as a common currency but there was no one in overall control.

How likely that a BRICS currency not backed by gold or similar could be independant of the largest players I’m not too sure.

I’m not sure about China, as they would be shooting themselves in the foot if they attacked the dollar system, given that the USA is a major customer.

I’ve been watching BRICS ever since it was BRIC! I used to be bemused by it but am surprised at how far it has come in twenty years.

I can’t wait for that August conference. It should be interesting if nothing else.

In a different set of data published on Wednesday, the Economy Ministry said inflation was running at 3.59% on an annual basis, up from 3.35% a week ago.

Double-digit annual inflation hit Russia last year soon after it sent its armed forces into Ukraine on Feb. 24, 2022, a move that prompted sweeping Western sanctions.

Annual inflation in Russia has dropped below the central bank’s 4% target in recent months due to that high base effect, but is now climbing once more.

Doesn’t look like hyperinflation to me. In fact the whole idea of defaulting on Western debt seems like a very good idea.

If you are a country that can buy its goods with BRIC versus Dollars, what is the point of being tied to dollars? As the country that prints the dollars exports more dollars than goods, what do you need to be on that merry go round for?



What about the goods they can NOT buy from BRIC? Tech such as semi-conductors and things with those semis in them.