The BRICS, De-dollarization and Reserve Currencies
Kremlin spokesman Dmitry Peskov, quoted by RT on Aug. 4, brought some clarity to the widely discussed issue of a “BRICS” currency. Introduction of a single BRICS currency is impossible right now but this does not mean that the issue should not be discussed, Peskov said.
“Certainly, expert discussions are underway about the possibility, expediency and feasibility of plans to introduce the national currency of some kind of integration processes. This is still a discussion process; it is clear that it will be protracted over time. In the near future, this is unlikely to be feasible, but the use of national currencies is already a reality that is growing on a global scale, and this practice is resorted to not only by countries that face sanction limitations, but by those that do not.”
As explained in a recent interview on Lebanese TV by EIR Strategic Alert co-editor Claudio Celani, “de-dollarization” is inevitable, but “a new currency system,” “a new international reserve currency” or even a “BRICS currency” are three different pairs of shoes.
As the U.S. is losing quotas of world trade in favor of China, and in the context of Washington’s weaponization of the dollar, it is inevitable that the role of the dollar as a world trade and reserve currency is decreasing. It has already decreased, he said, and is being replaced with trade in national currencies, an option, however, that has some limitations, namely, that the currencies are not universally accepted. A clearing institution among several countries (BRICS for instance) could boost their role.
As to a new reserve currency system, at the current stage neither China nor India would like to join such an endeavor. As Italian economist Michele Geraci, among others, explained at the July 8-9 Schiller Institute conference in Strasbourg, France, Beijing will not easily agree to lose control over its currency. And the idea of a “BRICS single currency” is not only utopian, it is also strange, since who would be ready to surrender monetary sovereignty such as the Europeans have done with the euro?
The goal of the world community of nations must be that of a “New Bretton Woods”, an inclusive system of all nations in the world where national currencies values are pegged, perhaps to gold, or a basket of commodities such as Lyndon LaRouche explained in his July 2000 feature “On a Basket of Hard Commodities: Trade without Currency.” This cannot occur without a shift in Western economies, away from the post-Bretton Woods financial casino (This means a global Glass-Steagall banking separation, shutting down the worldwide criminal speculation windows, including the criminal utterance of digital “private currencies.” That must involve a United States which will have rejected its City of London-controlled “zombie dollar”. Otherwise, any currency that might be introduced will either remain “convertible” to some approximation of the quadrillions-dollar bubble system, or be at mortal war with it from the outset).
In the current discussion on “de-dollarization” and a “new world economic system”, the focus must be shifted away from monetarist forms of thinking about currency, towards a form of credit system such as Lyndon LaRouche explained in his famous 1975 International Development Bank proposal. To this purpose, the immediate target should be, as EIR authors have emphasized, the upgrading of the BRICS New Development Bank into providing a substantially increased flow of credit for development projects, such as Transaqua or the Inga Dam in Africa.