BRICS Financial System Will Be Like NOTHING We've Seen Before | Prof. Yan Liang
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- เผยแพร่เมื่อ 7 พ.ย. 2024
- [Part 2 of 2]
The BRICS financial system won't be a copy/paste of western institutions and it will certainly not be a second "Euro". Nobody would be that foolish again. Instead, the financial architecture will be a decentralised system build on the convertibility of currencies and potentially a common unit of account to replace the dollar's function as a world wide price tag.
This is the second part of a talk with Dr. Yan Liang, a Professor of Economics at Willamette University, a private liberal arts college in the US. She is also a Research Associate at the Levy Economics Institute and a Non-Resident Senior Fellow at the Global Development Policy Center of Boston University.
Yan specializes in Modern Monetary Theory (MMT), the Political Economy of China, Economic Development, and International Economics.
Yan Liang on LinkedIn: / yan-liang-1355b91a2
Professor Yan Liang on Twitter: ya...
She is an excellent communicator, as is Pascal, for regular people. I also appreciate people who are honest and not selling something. Thank you both.
I like the way she speaks... Confident without being too emphatic.
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On one hand, it sounds promising, especially the idea of moving away from the dollar as the world’s primary currency. It could give more power to emerging markets and break the dollar’s dominance. But on the other hand, the complexity of building such a system from scratch is mind boggling.
Can they really pull it off without the whole thing collapsing under its own weight?
Can the Brics nations really create a decentralized financial system that works for countries with such diverse economic policies and currencies? I’m skeptical, to be honest.
It’s a bold move, but there are so many risks. I mean, look at what happened with the Eurozone. Even with relatively similar economies, they’ve had issues with coordination.
I think it could work, but not without some major growing pains. The decentralization aspect is key, though. If they succeed in making it more flexible than the Euro or the Western banking system, it could be a game changer. But as you said, it’s a high risk situation, and having the right financial guidance is going to be critical. Honestly, this is where working with an analyst becomes invaluable
That’s what I was thinking too. This new BRICS system, if it really happens, will shake up the global financial landscape. I’ve been talking to my CFA, NORA JEAN ERICKSON, about it, and she’s been really helpful in breaking it all down. She’s told me that while it’s still too early to make any concrete investment moves, staying informed and understanding how this shift could affect currencies, commodities, and global trade is crucial.
US wanted to make a fool out of Russia and China. But instead, the US made a fool of itself. Let that be a lesson.
U.S is still standing strong.
my god, this fool is still cutting and pasting his old comments. If anyone simply goes to his page you will see this account simply reposts the same 2 or 3 verbatim comments. totally fake
@@colberthunter12 won't stand for long 😂😂
@@manivannana3317 если они исчезнут, то все вздохнут с большим облегчением.😀😀
@@manivannana3317 what's going to knock us down?
Excellent. Hope you can get Prof Yan on yr show more often Pascal.
Yan lang is brilliant , Pascal you must get her back again .
Agree, there should not be any common currency the likes of Euro. That should be avoided at all cost.
Absolutely no euro bis.
There should only be one currency, based on the carbon value of the product.
@@antonyjh1234Liberal value 😅 dies hard
@@seanzhang5554 Not sure what that means, its intention seems to denigrate, was that your intention? What do you mean by this comment?
No dollars😂😂😂
This is what I've been writing about BRICs for years. Good to have Prof Liang on the show. She's a better communicator and working class champion than Stephanie Kelton. Prof. Liang, Yeva Nersisyan and Pavlina Tcherneva are imho three of the most brilliant economists in the world right now, top 10 easily. (And they make Michael Hudson sound like a confused old man who cannot talk straight. Has to be said.) Not because they have genius IQ or that sort of thing, but because they are honest, speak truth to power, and seem to have their hearts in the right place. Macroeconomics is all about spiritual and moral economy, and very few academics but these three realize this.
@achrononmaster Thanks for this information. Especially your last phrase is food for thought for me. Thx again.
So a supranational unit of account, and an international clearing union, hmm, sounds just like Keynes' Bancor plan from Bretton Woods. Only took 80 years to prove 2+2=4 because the USA said 2+2=5 at Bretton Woods.
hahahahahahahahahahahahahaha
Don’t know what a spiritual economy is.
BRICS+ is a golden opportunity to unite. Mutually beneficial cooperation, respect, equality and a shared vision. 🇧🇷🤝🇷🇺🤝🇮🇳🤝🇨🇳🤝🇿🇦+
United States empire will always conquer
Actually all that glitters may not be gold.
BRICS supports “global governance” and “the central role of the United Nations in the international system,”
BRICS supports the leading role of the IMF in global finance,
BRICS supports the UN’s 2030 Agenda for Sustainable Development,
BRICS supports public-private partnerships to help nations achieve their Sustainable Development Goals (SDGs),
BRICS supports the reduction and removal of greenhouse gases to combat climate change,
BRICS supports the creation of carbon markets,
BRICS supports the World Health Organization (WHO) and its “central coordinating role” in strengthening “the international pandemic prevention, preparedness and response system,”
BRICS supports the development of “safe & effective vaccines,”
BRICS supports “digital transformation” using 5G and other “emerging technologies,” and
BRICS supports the goal of “Strengthening Multilateralism for Just Global Development and Security” instead of the goal of “Building a Just World and a Sustainable Planet.”
- Peter Koenig and David Skripac, Nov. 2/24 (BRICS’ 16th Summit in Kazan Revisited)
It only took 80 years, but John Maynard Keynes was proven right. Should have just went with his Bancor plan from the beginning.
Brics may not be what we may wish it to be.... be cautious and dig deep.
@@lagringa7518 Doesn't matter, if it turns against their principals, they would have the same fate as the current system.
So basically use the 'Unit' ONLY as a replacement to the 'dollar' for clearing trade deficits between nations and NOT use it/have it tied to the local economy of each member country. And also IMPORTANTLY devise a methodology whereby member countries DO NOT STOCKPILE the UNIT (itself) so as not to artificially affect the natural supply&demand balance = emulating the problems with the current petrodollar system.
As soon as any system is devised you can be sure there will be people working to 'game' it.
The problem is what would the point be not to, in effect, stockpile?
If any country borrows for real infrastructure, the positive growth of the real economy will make it easy to repay the loan.
IMF dollar loans usually end up stashed in the London offshore accounts of oligarchs, leaving the people with unrepayable loans & in debt peonage.
The British empire didn’t truly fall it evolved
A fall is a fall, whether evolve or revolve or collapse or becoming weak or becoming stupid 🤔
@@Aramsa-Khan What fall. ? There is no accountability to anyone in those offshore accounts, that enrich the British banks & bankers, and also corrupt country heads who steal & hide the ciuntrys INF koans.
Pure abuse and piracy by British bankers, with no accountability. It encourages theft .
@@qjtvaddict London is necessary for dollar hegemony. US prints dollars, bribes leaders with piles of $100 shrinked wrapped bills, London provides all that is necessary to launder the cash into offshore accounts..
All money in the world is debt, all money you hold is other people's debt, this all is supposed to return to zero as all loans should. As all money is taxed out again, be design, the public are not supposed to hold dollars, the fluidity of money must mean that it always flows, if it flows into property it does not mean the money exists to buy it.
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It’s really heartbreaking to see how inflation and recession impact low-income families. The cost of living keeps rising, and many struggle just to meet basic needs, let alone save or invest. It’s a reminder of the importance of finding ways to create financial opportunities. You've helped me a lot sir Brian! Imagine i invested $50,000 and received $190,500 after 14 days
Absolutely! Profits are possible, especially now, but complex transactions should be handled by experienced market professionals.
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Brian demonstrates an excellent understanding of market trends, making well informed decisions that leads to consistent profit
Pascal doesn't let anything get past him.
The architects of the Euro were definitely not economists. It was doomed to fail from the start.
Americans. Like the one ring in the _Lord Of The Rings_ it was designed to lock in the countries of Europe and destroy their sovereignty. How can you be sovereign if you can't even issue your own currency! It also props up the US dollar as the Euro is linked to it and is not allowed to compete with it.
The Euro. European Single Currency. Britain was a member of the European Union. Britain did not embrace the Euro. Numerous countries in the EU are still using their old national currencies. There are no EU regulations to enable aspiring members to adopt the Euro on Day One.
Some have said it was intentionally created to subjugate its users to a "country with military bases all over the continent"
They were bankers from that private system community.
I am here for more Prof. Yan Liang
She is sharp
Yes. Very true. BRICS are not looking at creating their own currency, not for now but could be in the future. They are looking at payments and clearing using own local currencies.
bitcoin
What Prof Liang is saying is what I have conceptualised for BRICS Main Currency. A BRICS currency would sit at the top which can be exchanged by the buyer, within or outwith BRICS, to pay the seller.
What about counterfeiting problems?
?
Prof. Liang - All round just superb
All of 159 nations should adopt BRICS Chain as national currency including BRICS member nations ❤❤❤❤❤
no, only bitcoin matter
The ICU is a numeraire. Money has two functions: token of exchange and store of value. The numeraire is a token of exchange - a numerical reference point. What does it buy us ? Well, if all participating national currencies have a conversion rate to the ICU, it eliminates cyclical inconsistencies between currencies. It still doesn't store value. It disappears after use. Why would we want it to store value ? A: because of time lags inherent in the nature of production. A farmer must rent land, buy fertilizer, seed, rent machinery, buy fuel, etc. before planting and well before harvest. The process is not instantaneous.
Finally someone talked about the praxis. Saying the is not nice to use as a store of value and "stock pille it" is cool and all but in the practical situation it got store at least some value over time otherwise will fall in unuseness because of the calculational power to use being too high. And people using dollar because it easier.
@qualquer1177 correct but computing power, data about money flows (available from digital currencies) and algorithms may make a numeraire feasible. Soviet central planning failed due to a lack of data, computing power and algorithms. It might be doable, though never done before in human history: economic balance
@qualquer1177 dollar's problem is weaponization makes it unreliable. In God we do not trust. Lol.
Thank you both. Great discussion.
The term "the West" is pretty obsolete too. It's actually the G7 we are talking about.
G7: Gang of 7
The G7 is literary the Gang of Seven. Period.
Kólönïser 7
So leave Australia out who now is equal first in the world for gas exports? Ignore the trade in iron ore? Australia is a country of 25 million that is a big supplier to those G7, UK for example 9% is electric heating, the rest is gas, now that the west is trading amongst themselves with gas with them blowing up pipelines and trade for some of these countries, Japan won't exist as well without coal from Au.
To say the west isn't the whole west seems as like you are diminishing the whole.
The problem with the common clearing unit is that countries like China and Russia, which can offer more goods to sell than they need to buy from other countries, will be forced to import things which they don't really need or things they can produce themselves thus discouraging their own domestic businesses.
Keep raising educational level, and spreading market access information, and improving worldwide communication & logistics infrastructure, and promoting open trades, ... then more and more entrepreneurs in the other 192 UN member countries, can discover that they can produce something that would be desired by someone in Russia and China, if not somewhere else. It's paramount to share information and promote overall global trades, for there will always be people everywhere who will seize opportunities to improve their livelihoods through endeavours and ventures.
Outstanding, WOW, she is so articualte and sensible, much more so than most ivory tower economist. A new force and class of young progressive economist to save the world.
I really appreciate this video as it has helped reconcile two ideas that I thought might be mutually exclusive: MMT and international currency. But Dr. Liang beautifully described how these can co-exist. She is a very good conceptual communicator.
Also "It's not going to be a common currency to replace a national currency. Please don't do that, right. The Euro lesson should well learned." Sick burn! 🤣
Thank you, Professor Liang! That's what I'm saying, the global banking needs an overhaul.
Nice content
Global south countries cannot force their fiat currency to be valuable. The US is loosing that very ability right now. It would benefit BRICS to pay attention and learn the lesson before they experience the same disfunction caused by a Cantillon effect run amuck.
It is good that they are acknowledging and addressing the 'beggar they neighbor' principal and the fact that circulation and clearing become impossible with excessive hoarding of the medium.
More content from Prof. Yan Liang please. It's highly interesting to learn about, how a more just financial system can be built.
Greetings from Australia
The global south.
XRP is the clearing unit
The west's flawed system doesn't make MMT any better or any worst than what we have now. The value of an MMT currency seems based, not on gold or oil but, directly proportional to the confusion the system it creates. Money, in the simplest of terms, represents a good or service provided that is transportable, durable and the users have confidence in. That's it. It's not about the money. The apparent value of the product or hard work that it represents and then exchanged at a store...for another product. Money moves products easily, that's it's function. In a recession drop taxes to encourage production instead of reckless spending.
I'm favoured, $32K every week! I can now give back to the locals in my community and also support God's work and the church. God bless America.
Do you invest with a professional broker??I'd appreciate it if you show me how to go about it.
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Wow! Kind of in shock you mentioned expert, Elizabeth Regina Nelsen. What a coincidence!!
No doubt she's very good, I started with 5k and cashed out 40k after 1 weeks. I still wonder how she got her analysis.
So, the issue is not about money. It's wether Uganda has the capacity to manufacture what it needs. As long as Uganda is not an industrial nation, it can't escape debt prison. So, money is not the issue. The issue is the structure of the Ugandan economy and how to transform it given the global legal structure that prevents such transformation of the Ugandan economy
GOLD>>>🥉
If its pure fiat, it will be a failure off the bat.
A proper system that will liberate humanity
Time limit the clearing currency so no nation can hoard it. Have maximum levels of reserves broadly based on population of the nations involved and make sure the clearing currency has movement around several nations to avoid being cancelled.
These would reduce the gamification of the currency and would allow some stability for nations without allowing anyone or group of nations to control it.
The problem at the moment with currencies is that they are controlled world wide by a small group of individuals for their own benefit, while being created out of thin air. To have freedom for all currency must die as a never ending entity which can be hoarded by some to control others over generations. Unless I’m an economic genius I don’t understand why no one seems to see this problem. It has happened countless of times throughout history until the currency collapse so why do we repeat this system over and over again? Currencies die just like everything else in the universe so why don’t we control its death in a manageable way to benefit everyone instead of keeping it on life support until war destroys it?
Agreed the two great evils are inheritance and compound interest 👍.
Great talk thank you so much it really thought me a lot
😢🤔Excellent Conversation ✊🏿💔
Mobilising domestic resources is easier said than done, even in the global north. Prime example, Canada. Our misguided desire to "save the planet" prevents the extraction of many local resources.
As long as consumption behaviour doesn't change, isn't "save the planet" a lie/excuse, when the same resources, extracted elsewhere, are consumed anyway?
Those resources in the ground are part of a much longer game.
Excellent interview.
great piece
Did she really say that the Brenton Woods institutions need to be reformed? How would that work? In the US we have a lot of people who think the democratic party can be reformed. BW institutions were designed to consolidate power and that is what they are attepting to do and to me they are unlikely to change.
It'as flawed from the beginning. In any case, it has become "obsolete", and if it won't reform itself, then well, it will naturally, eventually, get replaced.😅
@@btgan3838 That is my feeling as well... Bernie try and reform the democratic party with no results... The 'progresives' get co-opted by the democrats... I take that as an object lessen in how bureaucracyof how intrenchedies can/cant change... I was in Eugene where the Professor lives.
Sounds like the Globalisation of the financial system.
the common bridge currency is called XRP. no matter the price it yet provides a level playing field for all countries, banks and financial institutions and their currencies. no country has jurisdiction... listening as i talk and the exact resolution is XRP
Bingo!
Good morning Prof Yan and Dr Pascal ❤️ASEAN🇨🇭🦾😇🌹👋
I think the professor is proposing a de-nationalized reserve currency, which sounds like a good idea, but the prospective reserve currency must interface with national currencies to have value. This means highly productive economies like China's will accumulate this prospective currency whether they like it or not, and forcing by one means or another countries to divest themselves of this prospective reserve currency risks devaluing it and would discourage its use.
The ideal situation is that which ever country is not expected to horde a lot of this and you are expected to ensure that this unit remain more or less balanced within a certain limit. How they are going to design such a system and still ensure the individual governments act fiscally and monetary responsibility i do not know.
Brics was a wonderful idea.
Thanks!
*Part-3.* The macroeconomic policy target should be full employment. You also desire price stability. So "borrowing" is completely stupid. You *_never_* need to borrow (if you are a currency issuer). The government Tsy bond is an interest rate maintenance operation not a financing operation --- provided the currency is on a float, not a fixed exchange rate (so 1st get off the fixed exchange rate). But then to issue bonds is just idiotic, it serves no public purpose and is pro-inflationary (the interest rate is the own price of the currency). It is even worse: a positive interest rate policy is _basic income but _*_only for people who already have money_*_ and in proportion to how much money they already have._
For this reason local government councils also never need to (be forced to) borrow. The central government can give them an overdraft facility. Sort out how the budget was abused at the end of the year and slap a few knuckles.
@Achrononmaster "The macroeconomic policy target should be full employment." Why? For me, that is capitalist ideology. I think a capitalist economy is not a free market economy. The target should be ENOUGH employment. And employment is not an end-in-itself, it is a means to an end, which is ENOUGH PRODUCTS.
Part 3 can clarify purpose of clearing unit? Past determining a particular exchange rate on an immutable DAG (blockchain) it could be tethered to conditional layers… so un- to automated ‘clearing measures’ (like smart contracts)? Then these measures can be un- to automatically negotiated, litigated, etc.
A wise economist once said -
“ don’t do as bankers say , do as bankers do “ Central bankers globally are presently stockpiling physical gold . President Putin just went on the world stage and stated that he wants physical silver in Russian vaults .
We had a clearing unit before we went over the cliff and implemented the EURO. It was the ECU and we had it for decades before and it was what Yan Liang describes or at least that‘s what I understood. It was fine.
Ignorance cannot be shocked but as a blessing.
To build bridge you need materials (stone, send, cement, steel), technology and tools, operators (workers and manager), most of country have most of it. Maybe in developing countries they don't have good managet to manage the Project in efisien ways if you countries have all of them no money need to build bridge. So basically foreign currency they borrow for the project mostly for ineffective management or corruption.
A currency unit backed by nothing? Isn't that the dollar system.
There is no way that some countries would not build surpluses in any unit of exchange. This narrative pre-supposes that all countries are equal or can be made equal. The issue is the means of balancing transfers between surplus and deficient countries as performed by exchange rates.
As Yan Liang tells it she advocates a system where countries with surplus holdings of a settlement unit are 'wiped out' or equalised with those with deficient holdings. No surplus country would subscribe to this state of affairs because it would be subscribing to underwriting the consumption of deficient countries without realising any real gains, i.e. the current dollar system with the US as the deficient consuming country and everyone else as surplus countries.
Even the dollar system has mechanisms that reward surplus countries in the form of the yield on their US treasury holdings, albeit that these yields are not market competitive; in that holders of dollar surpluses cannot invest anywhere (without US regulatory oversight - CFIUS) in the US economy to maximise the returns on their holdings. Thus ensuring the role of financial middlemen like hedge funds and private equity that can arbitrage differences in financial instrument rates by collateralising treasury assets to buy riskier returns boosting assets such as stocks - carry trade.
Another issue, is the deriding of the Euro experiment as a failure. This is a profound misconception, as the institutional process, mechanisms and pathways to the establishment of the common currency delivered on their particular objective of a common currency. It is like describing a struggling post-graduate student as a failure even though he excelled at High School and undergraduate studies. A better analysis would be a consideration of the factors that enabled such a student to gain entry to post-graduate studies against his current hindrances.
A further example is Russia, under a common capital transfer system (fiscal union) in the Soviet Union that placed Russia as the primary source for transfers to deficient undercapitalised Warsaw pact countries - the Soviet Union collapsed under the financial strain. While today's Russia has shown considerable resilience in the face of western sanctions.
The current US system is backed by implicit coercive military power, in this way the US secures for itself cheap raw material inputs and the notion as a 'safe haven' for global capital. This allows the US to dictate the cost of global capital to its own advantage. If the dollar where to behave in the manner of Yan liang's settlement unit, to my understanding it would mean the treasury holdings of surplus exporters would be 'wiped out', while the debts of consuming countries (like Argentina) would be written off.
This is in fact similar to the situation faced by the EU. They were unable to conceive a system that accounted for transfers between surplus savers (Germany) and deficient countries (Greece) within a single currency unit without the mutualisation of debts. They did place fiscal constraints on member countries hoping this would signal confidence to the dollar competitive capital markets; enabling the private sector to act in part as part of a settlement balancing scheme. In her conception, Yan Liang forgoes this latter confidence bolstering role of the private sector, calling instead for a detached intra-central bank scheme with no relation to market realities.
I find myself suspicious of Yan Liang's contribution to this issue. Firstly, she advocates underpinning a settlement currency with nothing but words, then she says 'allow that currency to make non-market financial transfers between surplus and deficient members', without elaborating on who would bear the cost or benefit.
Her contribution remains half-baked without accepting the inevitability of imbalances in trade, and an institutional market-based means to address and price the settlement of such imbalances.
In conclusion, there is the need to accept that there is no perfect economic model, whether the dollar system, the gold standard or the eurozone. None can operate as a perpetual motion machine without a patchwork of regulatory and financial adjustments acting as inputs to correct deviations away from ideal paths.
except it doesn't benefit the US, but all the individual countries.
@@oki148 Any country or organism that consumes more than it produces (from and for another) is in a beneficial relationship. The term is a parasitic relationship.
My idea is that BRICS need a neutral, gold backed stable coin. Peg it to 1 coin equal to 100000th of an ounce of gold. Not too strong, not too weak. Suitable for everyday transactions that everyone can use. A currency for everyone. Very difficult to speculate against as well. You want to sanction my country? Foreigners can buy directly in gold.
In my view, trade is a dinamic process; not a static thing but a flux. If two countries trade with each other it is not a once time event; but, usually, a process that will continue for years out of mutual needs. So, taking into account that the current transactions will be followed the next period by others, any problem arousing by any disagreement over local currency values may be settled in a clearing house that would act to compensate any imbalance. Something the NDB is doing now. What I think is urgent is to establish a unit for accounting. For measuring, like the meter or kilogram. More easily achievable in phiysics than in economics. And the US dollar is no longer a reliable one (stretching and contracting). Regarding investment and debt, the foreseeable future may be more important than reserves; in dollars or gold or whatever. This is an ongoing process; and the results are in the making; the problem with it is that the institutionalization of it may be flexible enough to deal with everyone's needs. A complex, difficult and long lasting process that is going on at a speed I didn't anticipate. Thanks for the conversation.
Surplus ICU can be invested in the NDBank which can then be availed as low interest loans to members
Seems going in the right direction. 1 currency to inter change and as many currencies as there are economies.
My credit card pays reward units when I spend. They just expire progressively after 12 months.
This would be better for the BRICS Unit rather than Austrian inflation since the Unit value would be preserved or even increase.
My advice to BRICS/global south. The only "language" a *power* understands or respects is another *power* at eye level.
Balance the USA/collective West out, and attain the natural balance.
The Unit of account could have a designed-in rate of decay (like radioactivity) that discourages hoarding and motivates spending to benefit from the most purchasing power as possible.
This exchange idea is completely ridiculous, it is not going to work if the currencies are not properly tie to the common element. How is a country going to acquire some of that common element if their currency is useless. How are other countries suppose to trust that particular country is it is able to create as much of his currency as he please without consequences.
Would also like to see an interview with Zongyuan Zoe Liu about China's strategies to invest their foreign currencies.
See the BIS are about to pull out of the MBridge project. Well they've taken it to where they wanted to and have left the users to it. People have been saying that because the BIS have left this project, then its over. Its a digital financial clearing house, using a digital ledger, it can only stop, when the users ALL pull out. I suspect BRICS+ will create and utilize the learning's from this BIS project to create their own Digital ledger system, all good I reckon. And yes, Indigenous societies do not like to use the words Resources and Human together, thank you Prof
Yan Liang knows what she is talking about. Pascal is still learning 11:53
Living in luxury with your eyes closed
Misunderstanding all you see
It's getting hard to be someone, but it all works out
It doesn't matter much to me
Let me take you down cause I'm going to
The Global South
Everything is virtual
And nothing to get hung about
The Global South forever
I agree with the Prof, but I wish to postulate another way of looking at this.
The USD was the simplest "Fiat Technology" that could be distributed and made accessible to everyone, at that time.
But it had one huge drawback. The US could print it and caused chaos both to the climate, read excessive greed, and humanity, read wars and sanctions.
Reason. The US solely owned the "Technology".
But now Technology has advanced enough to create a standalone Fiat that is accessible to everyone in the same way that the USD was, but without the unfair risks. Effectively,, the USD must be regarded in this light as outdated Technology
So a proper Fiat Technology is globally owned, and like the weather, it is not influenced by anyone.
The rules of acquiring this unit must be clear, the rules for losing the unit must be clear, but it can only be transferred from one country to the other in a Distributed Ledger Blockchain like system were all participating central banks are the local node.
The local node uses local currency for its citizens but uses the Global Unit in the ledger to deal with foreign countries
What Ms Liang is proposing concerning the properties of the exchange currency is impossible. Rather create a currency tied to a basket representing the average purchasing needs of a person in the least affluent country in the group excluding luxuries. This would make it easier and favorable for both the debtor and the borrower to settle. As the poorest gets richer, they would be effectively paying back more but will have the ability to do so. If a poor borrower doesn’t get richer, they will not be burdened by inflationary pressures elsewhere. The built-in incentive would also promote solidarity and trust favoring a shared prosperity for all.
Interesting.
@15:50 bad analysis from Pascal? There is no need for fiscal transfers between individual nations. The state currencies are domestic scorepoints, they are not needed for inter-national transfers. The forex desks take care of all that. In aid of a poor country in desperate need, then that's the role for the UN, not for any one "rich" country. A net exporter ends up with "more cash". Yes, but that is just a promise of a bank statement, a piece of paper. They can only use foreign currency (or convert to the domestic account, then forex back again if needed) to purchase what is for sale. If a country needs to use output for domestic prosperity they should not be forced to export, and can block sales to the foreigners. There is no international agreement needed.
The ill-conceived idea international fiscal transfers are _needed_ is a fixed exchange rate prejudice. On a floating exchange rate their is no need. If a country finds they are importing inflation then they should look elsewhere to where production is failing, or corruption is rife, because once forex markets arbitrage there is no need for continued inflation, the forex pass-through is a one-time adjustment to changing structural factors usually. If there are corruption factors then the problem is not the exchange rate mechanism, it is the corruption. It is a legal justice system problem, failure of rule of law, not a financial problem. It may be creating a downstream financial problem, but the remedy has to be to address the source, not the symptom.
If the pass-through imported inflation is from a foreign monopolist setting price at the margin of production (OPEC+) the importing nation has no choice but to re-gauge the currency or shut the lights off. How? By paying workers in the public sector more (or subsidizing the imports). Prices will adjust upwards almost "overnight". This is a re-gauge, it is not inflation. Inflation is a _continual_ upwards adjustment in the price level. A foreign monopolist raising price is a one-time adjustment (The Saudi Princes had a bad day at the casinos.)
You provide your importers with the higher amount of purchasing power they need to re-balance the *_real_* terms of trade. Guess what? The Saudis will always sell. They do not care what your wage level is.
The water cycle/energy cycle.All flows.
And: raise of energy-flux- density
Yes... Development of your own economy and production first. And keep them. America has failed in this with their sending manufacturing off shore. It destroyed America's economy.
Fiat money is garbage but you know we will play stupid games and win stupid prizes
I ran MMT verses Keynesian through AI. I finally have an answer on the difference. Classic Keynesian still insists on using the surplus to pay the debt off. The MMT model states this is not a concern. If there is too much money in the system, taxes are used to take excess currency out of the system. This is opposite of what taxes are supposed to be used for. Classical systems use taxes to collect revenue to run the government. This seems difficult to me. The government has to use printed money not just to fuel the economy but run itself. We know that centralized institutions like governments are insatiable in their demand for more resources. There is still a conflict in the needs of the market and the will of the state.
Regarding a common exchange for BRIC's, it will most likely be a digital currency. The difficult part is that none of the BRIC members have anything in common. The European Union works because the members have same geography, market philosophy, and political system in alignment. There are reasons why alliances be it military or economic occur. Similarities and common cause will mean the like will clump together.
This is where the author of Neutrality Studies has to make a case. What is holding BRIC's back is the diverse differences and agendas of the different members. Two members India and China absolutely dominate. Russia and Iran which have negligible cash flows outside of oil are looking for sanctions evasion not efficiency in trade. Too many of these countries have too little in common or trade with the others. Imagine each country was a node on a network and the size of the circuit represented trade.
China is going to dominate all of the trade relationships. That will mean China will attempt the common currency to work in its best interest. Ergo, the agenda of Neutrality Studies will still fail. Replace one Hedgemon with another.
I would research the "balance of power" concept in IR.
If you see the countries as nodes and the trade relations as links to the nodes Almost all of the nodes will have links to China but that doesn’t mean the individual nodes can’t have links in between them thus creating a web.In a web based system no node is indispensable.
@@skydragon23101979 However, the largest connections are between China and someone else. Iran and Brazil have no significant trade. If China is at the hub of all trade with the members, why would China agree to an exchange that is not favorable to them when they can argue they are the hub? It is only natural.
Interesting. Clearing Unit can be backed by Gold issued by NDB to participating members for use as cross border settlement via Mbridge. Countries participating should then have reserves in Gold bought from COMEX, LBMA or other Gold exchanges independently and deposited and accounted by NDB. When a certain limit of Clearing Unit is too excessively accumulated past its limit, this should then be cashed out by the NDB to the country concerned. Is this how it will eventually work?
Not sure an out why s country should be punished for having surplus. That’s completely unfair. For countries whose trade is more through private corporations, it makes little sense at all.
Can any of these private corporations make their trade without all the "public goods" provided by the country? 🤔
Why not mixed commodities x amount of Gold, x amount of silver, oil, gas, even grain and meat or rare minerals as security coins mixed with a local curries to back them
The clearing unit can be unbacked? Doesn’t that cause problems of inflation worldwide? The country currencies will no doubt become connected to the ICU debt relationship through its conversion rate with the ICU.
It appears that accumulation is no more important than than large deficit.
When you're not a market practitioner, you only talk theory.
MMT can be talked about forever... "if we only, if we do. If we trust, if we punish. And so on, and so on" always when she hits a wall she says... "thats a great question"
Come on alreafy.... we cant expect to tryst anyone, and tgat is how it should be. She is deep down the MMT rabbit holes.
Even if digital, eho cheats, who blows up the servers... nothing is practical here....
Gold
Building a Just World BRICS by BRICS.
*Part-1.* @6:40 and after... I disagree. Every nation has a forex rate. Traders do not care what your price level is, they just want an arbitrage.
SWIFT is controlled by the group of ten with 13 banks, all located in the white imperialist western countries. They charge a minimum of 4% both ways for transactions. Assuming world trade of 10 trillion, with 6 trillion by non-whites countries, this amounts to 240 billion dollars of free money per year.
Most countries have their gold deposits in banks in the US, UK, Switzerland, France, or Germany and this could easily be frozen or seized.
Frozen assets include over 100 billion (Iran), 330 billion (Russia), 68 billion (Libya), 40-60 billion (Syria), 30-50 billion (Iraq), 24-30 billion (Venezuela), 9.5 billion (Afghanistan), 6 billion (Cuba), 1 billion (Myanmar) and over a billion belonging to Somalia and, Eritrea, Liberia, Ivory coast, North Korea, Sudan, Zimbabwe and others.
The UK holds 330 tons of gold and only 3.5 tons were mined in the UK in the last 1000 years. The rest was looted from across the globe.
Gold mines in France produce roughly 1.5 tons of gold a year. Even if we take two centuries, it would add up to only 300 tons. And yet, France holds 2500 tons of gold, the rest looted from the rest of the world.
Spain holds 282 tons of gold of which 200 tons was looted gold.
8000 tons of gold held with the US is gold seized from other countries. Not to say that the very existence of the US is illegitimate.
Thank you for adding factual context.
@@vgstb he is very wrong swift does not charge 4% you must be mad to think that
Where are the finance ministers of global south countries educated?
Are they being trained at American Universities and being taught borrowing money from the US is the smartest thing to do?
There should be a common currency. That's the only way to defeat the USD
Brics backed by oil or gold will be no different in the system of debt.
wouldn't it be simpler computationally to use a commodity such as gold as a reference point to assign value to your international trade fiat currency?
10 More years require for BRICS currency.
Aren't certain countries already practising currency swaps to get around the need to use the USD? The central banks of mutual trading countries hold each other's currency and pay for imported goods in the currency of the exporting country.
They are all in it together acting like they are two opposite parties but they ultimately want to achieve the same goals . We are switching over to new financial system (age of CBDCs ) which will be the last chip in the enslavement of humanity
They need some time off block chain. With a robust Smart contract. Just like Bitcoin
I get the feeling .. one ring rules them all …😱
Besides the spectacle of a UN secretary-general obsequiously paying respect to a Russian president indicted for abducting children, last month’s Brics summit in Kazan featured the more technical, but geopolitically more consequential, push “to make the international financial architecture more inclusive and just”.
Brics finance ministers specified three aspirations. One: a cross-border payment system, separate from that comprising Belgian-based Swift, western correspondent banks, and the Federal Reserve and allied central banks. Two: securities settlement and depositary services. Three (which the UK as a global insurance centre should heed): an alternative reinsurance system.
All three reflect urgent Russian priorities. After Vladimir Putin’s full-scale assault on Ukraine, Russian banks were kicked out of Swift and many correspondent banking relationships. Moscow’s central bank reserves in Euroclear have been blocked. Sanctions on the Russian oil trade get their efficacy from western dominance of insurance.
This urgency is a compliment to the west. It proves western financial sanctions work and should encourage their tightening. But should we worry that the quest for alternative financial cross-border connections could be achieved?
In one sense China has already done so with its cross-border interbank payments system. Cips does for renminbi transactions what the US’s Chips system and the Fed do for dollar payments. But while Cips activity has increased, it has not proved particularly attractive for those who can easily transact in dollars.
Technical solutions aside, the governance questions confronting an alternative financial architecture are massive. For example, Cips is as exposed to the whims of the government in Beijing as Chips is to Washington, Euroclear to Brussels and Swift to both - indeed more so, given China’s weaker rule of law and its greater controls on capital flows.
Then there are economic challenges. Many countries seeking alternatives to dollar dependence are structural net exporters, have non-convertible currencies or both. In the absence of perfectly balanced bilateral trade, the lack of a common convertible medium of exchange - the dollar or euro today - would lead to ever-growing lopsided claims in one another’s currencies. Making it simpler for Russia to be paid directly in Indian rupees, for example, does not help Russia’s headache of what to do with the rupees it has built up.
But the west cannot be complacent. The technological and geopolitical races are two sides of one coin. If some countries adopt technology that makes cross-border exchange cheaper and more efficient, the race is on for the business of the non-aligned part of the world.
Such technology is there for the taking. Central banks are developing digital currencies and testing distributed ledgers for clearing and settlement. The Bank for International Settlements has worked to modernise or supersede old-style cross-border practices, in part with digital technology that gives central banks a direct role.
Conceivably, the Brics may use one such project, mBridge, which has China’s central bank as a partner, as a blueprint. The BIS’s withdrawal from mBridge last week shows the political sensitivity (both it and partner central banks deny it is designed for sanction-busting). But this is a red herring. If China, or the Brics collectively, want smarter cross-border transfer technology, they will not find it hard to build. To attract users, they must overcome the governance problems mentioned above.
If they do, they could create economic incentives for a geopolitically profound shift of financial activity. In turn, the west could intensify the cost of switching by denying any financial institution the ability to be linked to both systems at once. But this would be costly, splitting the global economy into separate blocs with few financial connections.
Much better would be to retake the technological lead and upgrade the dollar-centred system to something as quick, cheap and efficient as anything anyone else can offer. This would blunt the advantage a rival bloc could offer, while maintaining the attraction of access to the richest, most liquid and open economic blocs in the world.
The EU has a special responsibility in this regard. The US’s willingness to lead a defence of democratic multilateralism is unreliable. And the European Central Bank has embraced innovation - including work on a digital currency and cross-border connectivity - more than the Fed. But unlike the ECB, Europe’s politicians do not fully grasp the geopolitical import of the digital euro and its international use. Instead, they wring their hands over Europe’s lagging competitiveness and limited strategic autonomy. Here is a way to improve both.
Yes to Multipolar World Yes to BRICS+
Buy gold, buy gold!
Bitcoin
18:16 Maybe there should be a tax on the clearing units, which can go into funding BRICS development projects, imposed on clearing units idle (hoarded) for longer than a year. This is taking inspiration from Islamic zakat concept, which is levied on idle wealth.
If your currency is not backed by anything why would anyone want it? If it is just another fiat who gets to control the new fiat?
You do not have to need it unless you are a tourists in my country. The exchange of goods and services would be made based on blockchain technology where all the calculations are done with reference to a specific unit of calculation.
2024. India pays Russian oil in Rupees. Today, Russia has crores and lakhs of Rupees. What does India sell?
If Brics will follow the same principle aas the principle of the Brettonwood for control over the economies of other countries making the other currencies devaluating and such measures to keep the others as serving economies then there will happen as now the Brics countries doing . It should be realised at the outset that money is the medium of exchange to deal it as commodity is to destroy its worth leading cavous in al directions . It is rather better that as first measure stop, forbid and abolish the direct exchange and swaps of currencies and couple the exchange of currencies with exchange of commodities. for example a Russian exprter/importer wants to imports from China then he should invite bids for his exports in chinese currency to the extent of his imports eliminating the conversion and reconversion the same can be done by China and say Chinese exporter/importer if he wants to import from India he should invite bids for his exports in Indian Rupees to the extents of his imports so in this way the currencies will not be either appreciated or depreciated as we see . The balance of trade and payments deficit ill be minimised and normalised and the inflation will also ratinalised The burden on central banks will be reduced their day to day business of issuing rates of currencies exchange will be minimised and their long and short term open market term operations will be reduced and the fake business of money exchange will come to an end . else is upon you greed can not be satiated by any means .