BRICS plan to be based on Keynes’ Bancorp idea

Appears more viable than expected

It appears as though the BRICS plan is more viable than expected, as it is based on Keynes’ Bancorp idea (with unknown variances). (Source: Jim Rickards: informed speculation)

BRICS PREVIOUSLY APPEARED UNWORKABLE:

Yesterday I talked to Bryan about the upcoming BRICS meeting in Johannesburg and I said that China will never want to back the new BRICS currency with gold because they won’t want to limit their “money printing.”

KEEP NATIONAL CURRENCIES:

Today I listened to a Jim Richards interview suggesting that Russia has developed a very smart plan in which each country keeps their own currencies, but the countries will use a common currency to settle international transactions between each other.

KEYNES’ BANCORP:

This plan is based on the Bancorp plan that Keynes proposed at Bretton Woods (with some possible tweaks). There is not necessarily expected to be a large immediate effect, but Rickards said he expects the dollar to gradually lose value to gold over time and the demand for US Treasuries to decrease.

Rather than backing the currency with gold or commodities, the BRICS settlement currency (or whatever it is called) will be pegged to a reference weight of gold (rather than price). This means that no country has to own any actual gold – it’s just a reference value that is simpler to calculate than it would be if they used various commodities, including oil. [footnote]Rickards mentioned that Keynes initially wanted to use commodities in the Bancor, but the problem is that they are not fungible –there are many grades of things like wheat and oil. I recall Rickard saying: When people go down the path of a commodity-based unit of account, they eventually standardize on gold. It has more of the other properties of money than other commodities .[/footnote]

The BRICS Meeting in South Africa is scheduled for Tuesday August 22.

Victoria Nuland is expected to pay South Africa a visit to dissuade them from doing this.