BRICS Currency25 Apr 2023 10:57
So much talks of BRICS creating a currency possibly pegged to gold...
So far though they have made many bi-lateral trading agreements, with goods exchanged in their own currency.
I am not so sure how this is going to work...for example good exchanged between India and China, India buying some Lithium from China, will the price reference be taken from a Western market, U$D exchange denominated currency, or decided by the seller accordingly to its own market pricing?
How are they going to square up the opportunity to sell at higher price, in a U$D denominated market?
And in the case of creating their own currency (BRICS) which will price all goods exchanged in that market, what will be the reference parameters? If gold they will have to rely solely on their market, because that currency would become too expensive for BRICS countries to export to the rest of the world. They could create a BRICS currency pegged to the U$D with a variable exchange rate which changes, accordingly to economic circumstance...In this care there will be an exchange rate war between the Fed and the BRTICS bank, direction possibly would be a race on how prints more money.
Interesting times, but imo for now what's happening is just China trying to take advantage of geopolitical circumstances, with no intention what so ever to commit to anything that is not for its advantage....