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BRICS is committed to trading in national currencies, and many countries have already switched to this practice.

  • 53% of China’s trade is conducted in yuan, more than 90% of trade between Russia and China is in yuan or rubles.
  • In 2023, 80 countries have decided to switch to trading in national currencies.
  • Southeast Asian countries have unanimously decided to switch to trading in national currencies.
  • This is part of a global movement towards a currency alternative, caused by the need to avoid dollar sanctions.

01:50 BRICS summit in Kazan

  • The West and BRICS supporters assess the summit’s achievements differently.
  • Western commentators downplay the results, BRICS supporters exaggerate.

02:30 Crisis of International Economic Institutions

  • Legacy institutions of international economic governance do not meet the needs of most countries.
  • BRICS and others criticize the IMF, World Bank, and WTO for failing to serve their interests.
  • These institutions are in crisis, but the internal power structure of the BRICS is leaning toward alternatives.

04:01 Transition to a Multipolar World

  • The world is moving from a disintegrating Western system to a multipolar world led by China.
  • BRICS countries could follow China’s example by controlling corporate power.

05:49 BRICS Study

  • Russian government publishes study on “Improving the International Monetary and Financial System.”
  • Study criticizes dollar system, but many solutions remain problematic.
  • BRICS governments are still far from recognizing the need for change.

07:37 BRICS Currency

  • There will be no new BRICS currency, all talk about a BRICS currency is a fallacy.
  • The BRICS countries already trade in their national currencies, and other countries are also striving to do so.
  • The ability to choose a currency has become a matter of economic and national security.

10:01 Principles of a new monetary system

  • The main principles of a new monetary system are security, independence, inclusiveness and sustainability.
  • Countries are working on alternative platforms for messaging and interoperability of domestic payments.
  • Russia proposed creating a supranational infrastructure for a common payment platform, but this proposal was not adopted.

17:02 Transition to multicurrency mercantilism

  • Gradual transition to multicurrency mercantilism.
  • De-dollarization of world trade is easier than the financial system.
  • The importance of de-dollarization of capital markets.
  • Increase in the volume of foreign exchange transactions.
  • Dominance of dollar-denominated instruments.
  • The importance of de-dollarization for security and stability.

20:43 Creating regional hubs for trade

  • Creating hubs for trading oil, gas, gold and grain.
  • The importance of stabilizing grain prices for developing countries.
  • Russia as a key player in grain exports.

24:15 Liberalization of Capital Markets and Trade

  • The Difficulties of Liberalizing Capital Markets.
  • The Ease of Liberalizing Trade.
  • Historical Legacy and Arguments Against the New Currency.

26:08 The Dominance of the Dollar and Its Limitations

  • The Dollar as a Currency for International Banks.
  • Fundamental Principles of the Dollar System.
  • Contradictions in Providing Liquidity and the Attractiveness of the Dollar.

27:45 The Triffid Dilemma and the US Financial System

  • The US abandoned the gold backing of the dollar, which led to the Triffid Dilemma.
  • The Triffid Dilemma is resolved by depreciating the dollar, which causes a deficit in the US.
  • Financial bubbles help relieve pressure on the dollar.

29:21 Capital Flight from Developing Countries

  • The dollar system leads to capital flight from developing countries to developed countries.
  • Most foreign investment goes from developing countries to developed countries.
  • The problem is that about 10-13% of capital flows from developing countries to the first world.

30:17 Capital controls

  • The only way to keep capital in a country is to impose capital controls.
  • Selling natural resources and agricultural products in local currency can provide financial stability.
  • The case of Nigeria shows how capital controls can help stabilize the economy.

33:08 Liberalization and foreign investment

  • Liberalization to attract investment can be too high.
  • Foreign investment is a small part of overall growth in gross domestic product capital controls.
  • Capital controls can be an obstacle to development.

35:48 Problems with trade between countries

  • The lack of trade between countries is related to their production structures.
  • Creating conditions for expanding trade takes time.
  • BRICS has chosen a reasonable development path, but there are many problems that need to be solved.

36:42 SDR and de-dollarization

    • BRICS does not discuss the creation of a common currency, but calls for a stronger SDR.
    • SDR is an international unit of account controlled by the IMF.
    • SDR can be used in market transactions to resolve trade imbalances.
    • 38:26 Problems and prospects for SDR
    • SDR is subject to manipulation by large players.
    • The inclusion of the yuan in the currency basket changed the SDR formula.
    • The revision of the formula was postponed due to the pandemic, which caused criticism.
    • 41:13 Currency basket review and the IMF
    • The IMF announced a currency basket review without explanation.
    • The IMF’s governance is outdated and the SDR is no longer fit for purpose.
    • The IMF is based in Washington and is a mechanism for redistributing global wealth.
    • 42:02 Using national currencies in international trade
    • The question of creating a unit of account for clearing.
    • Central banks are buying gold at a record pace.
    • Gold is returning as a hegemonic asset.
    • 43:00 Alternative barter currencies
    • Central banks have accelerated gold purchases in 2023.
    • Gold and other assets may become alternative currencies.
    • Keynes proposed using a basket of 30 most traded commodities to determine the value of a currency.
    • 44:47 Creating a BRICS working group
    • BRICS countries may create a working group to determine commodities.
    • Russia recommends using its centers for trading oil, gas, gold and grain.
    • Uneven distribution of resources and their export from emerging markets.
    • 46:28 Stability and inflation in China
    • China has achieved stability with near-zero inflation since 1986.
    • Keynes’s plan assumed stabilization of import prices for the UK.
    • Combining the interests of exporters and importers for balance.
    • 48:10 Risks of currency basket manipulation
    • Central and commercial bankers can manipulate the currency basket.
    • Return of the Glass-Steagall Act to limit manipulation.
    • Liberalization of derivatives led to financial crises.
    • 49:58 China’s financial system
    • China avoids excessive financialization through state banks.
    • China supports the real economy, not speculation in financial markets.
    • The Chinese system is aimed at investing in the productive economy.
    • 51:59 Problems with the dollar system
    • The dollar system depends on regular inflation and financial bubbles.
    • The document acknowledges frequent crises, trade and payment imbalances, high public debt and capital volatility.
    • Capital flows from poor to rich countries, which serves the interests of developed countries.
    • 53:41 Splitting up HSBC
    • HSBC announced a split into HSBC West and HSBC East.
    • A possible reason is debt in the Hong Kong real estate market.
    • HSBC West is practically not growing, unlike HSBC East.
    • 54:32 HSBC and de-dollarization
    • HSBC is trying to unite the countries of the East and West.
    • De-dollarization of BRICS savings is a difficult task.
    • Russia proposes to create a BRICS digital investment asset.
    • 55:25 Gold and other assets
    • Central banks are buying up gold, which leads to an increase in its price.
    • China imports oil and metals for strategic reserves.
    • The idea of ​​creating a grain exchange to eliminate imbalances.
    • 57:10 China and reserves
    • China accumulates grain and oil reserves for stability.
    • The US emptied its strategic oil reserve by sending it to China.
    • China rationally accumulates resources to maintain stability.
    • 01:00:13 Monetary policy
    • Russia produces everything it needs and does not need reserves.
    • Each country is unique in its needs and resources.
    • It is important to study and apply China’s methods for stability.
    • 01:01:48 Financial repression
    • Financial repression directs capital to productive investment.
    • The West abandoned this approach since the 1970s, which led to a decrease in economic growth.
    • Money has a different nature in different economies, which requires diversity in monetary policy.
    • 01:04:26 Diversity in Monetary Policy
    • Central banks must take into account the diversity of markets.
    • China is experimenting and analyzing the results to improve policy.
    • The UK is not paying enough attention to analysis and improvement.
    • 01:06:23 Water Quality in the UK
    • The quality of the Thames has deteriorated due to sewage.
    • The UK must care about everyone, not just the winners.
    • Capital controls are essential for a stable financial system.
    • 01:07:43 Capital Redirection
    • The report suggests redirecting capital from first world countries to emerging markets.
    • Capital controls are not discussed, creating a difficult situation.
    • The future of pdevelopment will be interesting to watch.
    • 01:08:41 Uniqueness of economies
    • Economies are unique, and one size does not fit all.
    • China uses surplus to finance the Belt and Road Initiative.
    • The People’s Bank of China is looking at alternatives to Treasuries and gold.
    • 01:10:21 Bilateral deals
    • Bilateral deals were announced at the BRICS summit last year.
    • Examples include building a super container port in India and upgrading the power grid in South Africa.
    • These deals help develop infrastructure and the economy.
    • 01:12:19 Chinese reserves
    • China has cut its reserves by $25 billion, but is not dumping them.
    • The US is busy in the Eastern Mediterranean, making war with China less likely.
    • China could cut the US off, which would impact the US economy but not China much.
    • 01:14:34 Co-investment
    • Co-investment is possible and Sharia-compliant.
    • It is long-term stabilization and partnership in enterprises.
    • The world is changing rapidly and there is hope for stability and prosperity.
    • 01:15:23 Food Security
    • Food security is important for national security.
    • Examples: Burkina Faso imports tractors and fertilizer.
    • Changes in the world are positive for long-term stability and prosperity.
    • 01:16:22 Keynes’ Plan
    • Keynes’ plan included development loans to balance trade.
    • Most US debt is owned by US individuals and corporations.
    • China was the largest foreign owner of US debt, but now it is Japan.
    • 01:17:11 Conclusion
    • Thanks to Kathleen for being on the show.
    • Hope to discuss more topics in the future.
    • Call for likes, shares and discussion.

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