Discussions at the recent SCO Summit in New Delhi now point to the inevitable: The merging of new multipolar organizations and their collective reorganization of global finance.The Cradle
Finance, power, integration: The SCO welcomes a new 'Global Globe'
Pepe Escobar
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"For making the new currency as good as gold, a truly sound currency, it must be convertible into gold on demand. I am not sure whether this is what Brazil, Russia, India, China and South Africa have in mind," he said. "Using gold as money, the unit of account would be a true game changer, no doubt about it. It could lead to a sharp devaluation of many fiat currencies vis-à-vis the yellow metal (including the BRICS fiat currencies), and it could catapult up goods prices in terms of fiat currencies. It could be a shock to the global fiat money system. I am not sure that this is what the BRICS wish to achieve."
The aim seeds to be to create a stable dollar alternative for trade settlement and one that is independent of control.
Gold and silver have been the dominant means of international settlement historically before the recent use of floating-rate currencies post-1971 when the US unilaterally ended dollar convertibility at a fixed rate.
But that option comes with costs, too. At present the pros and cons of different solutions are being weighed and discussed.
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History never repeats itself, but it does often rhyme. - MMTer Mark Twain
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