We’ll find out. I suspect that the 85% of the world that are not US puppet governments will flock to the BRICS currency, gold-backed or not, as the REAL BENEFIT of that currency is that the Neocons can no longer use the banking system to punish those governments.
They have worse capital controls in place than the U.S.
SHANGHAI, March 5 (Reuters) - Billionaire investor Mark Mobius told FOX Business he cannot take his money out of China due to the country's capital controls, cautioning investors to be "very, very careful" about investing in an economy under a tight government grip.
"I have an account with HSBC in Shanghai. I can't take my money out. The government is restricting flow of money out of the country," Mobius, founder of Mobius Capital Partners, told FOX Business in an interview published on March 2.
"I can't get an explanation of why they're doing this ... They're putting all kinds of barriers. They don't say: No, you can't get your money out. But they say: give us all the records from 20 years of how you made this money ... This is crazy."
So, did the BRICS announce a new gold backed currency, or any new currency?
Another problem with creating a BRICS currency is that, logically, neither China nor Russia has the slightest intention of losing their national currency to dilute it alongside a group of issuers who have a doubtful track record in controlling their monetary imbalances. Over the past ten years, the currencies of the BRICS guest countries have depreciated significantly against the U.S. dollar. The Argentine peso has fallen by 98%, the Egyptian pound by 78%, the Indian rupee by 35%, the Ethiopian birr by 68%, the Brazilian real by 55%, according to Bloomberg, and the Iranian rial has collapsed by 90%, according to The Economist. Putting together weak currencies does not create a strong currency.
We must not forget that the performance of the Russian ruble (-68% against the U.S. dollar, according to Bloomberg) in the last decade has also been poor despite having a relatively prudent central bank.
The best “BRICS and guests” currency against the U.S. dollar in the last 10 years is the Chinese yuan, with a depreciation of only 14%.