They don’t want one currency. They don’t want to sacrifice their own currency anymore and be at potentially victims of another country. They don’t want a dollar standard. They would prefer a gold standard before a dollar standard. Well, hello there, my friends. Chris Marcus here with you for arcade economics as we kick off a new trading week and hope everybody is doing well out there and weeks off to a good start.

And today we are going to be digging into some of the things that the BRICs may or may not be saying about common settlement currency, a BRiCS currency, a lot of different terms thrown around and also people trying to understand what exactly they are doing. If they are moving towards something. It could be conceivably announced at the upcoming brics meeting a couple months from now, but with a lot of uncertainty following some of these discussions.

Fortunately, we have Vince Lancey of Goldfix. com substack, goldfix. com checking in with us this week to separate fact from fiction. So I think it’s a topic that’s going to be helpful for people. And, Vince, pleasure to see you, as always, here on Mondays. And how are you doing today, my friend? Thanks, Chris. This is a good one. I appreciate the call. This is a good one to talk about.

Well, I’m glad that you’re here and would like to start with something I saw last week from Luke Groeman, who I’m a big fan of and learned quite a lot from. And he had an interesting tweet here that had me reading more about some of the things that have actually happened. And Luke mentions Putin effectively told everyone why a BRiCS common currency has no prospects. In his Tucker Carlson interview, rapidly increasing trade volumes and local FX being recycled into BRICS produced goods, with any remaining net surpluses being stored in gold by the BRiCS central bank.

And perhaps we could start there again. I think, as people will find out today, there’s a lot in the actual specific words that are used in some of these things. So why don’t you start there, and then we’ll take a look at some of the things that some of the russian officials have actually said on the. Sure, sure. First of all, Luke is absolutely correct. Now, I can’t read his mind, but I’m going to try and spell out a couple words that people may not know as well as he does.

So, for example, Putin effectively told everyone why a brick’s common currency has no prospects. Now, common currency, first of all, can mean a single currency. So there will be no single currency, at least not yet. It could also mean a common currency that everyone know in the countries, the people themselves, they go to the store, they buy Starbucks with a BrICS monetary unit. And he’s saying that’s not happening.

Now, I’m not sure how he’s defining common, but I’m telling you that there won’t be a bricks currency that you’re walking around to Starbucks. Okay? The second thing is the BriCS common currency won’t happen because, and this is historically true, they don’t want one currency. They don’t want to sacrifice their own currency anymore and be at potentially victims of another country. They don’t want a dollar standard. They would prefer a gold standard before a dollar standard.

And that’s the whole point of multipolarity. The second part of his statement, rapidly increasing trade volumes in local FX. That part right there means we’re trading in our own money rubles for yuan, what have you, being recycled into BrICS produced goods. He’s also saying that BRICS countries are now making their own know, making their own widgets, making their own manufactured products, not just china, I guess, is what he’s trying to say.

And then in parentheses, it says, with any remaining net surpluses being stored in gold by BricS central banks. That’s the key, right? That’s the key. There will be no common currency the way I described it, but there will be a current account unit. A unit of current accounting was the phrase you used last week when we talked about this. And that current account unit will be used to settle differences.

Simply put, the world is no longer, well, this part of the world is no longer going to have debt with each other. At the end of every month, they’re going to close their American Express card out, carry no balances, pay no interest. They’re not going to be using treasuries for that. They’re going to be basically saying, I spent this amount of rubles with you, you spent this amount of yuan with me.

The difference is x. They agree on the difference. And we settle it with ultimately not upfront, but ultimately we settle it with gold and silver. Yes, and that makes a lot of sense. And one of the things that Luke was responding to was a tweet that Sergey Lavrov had said there is no ongoing discussion about a common currency. And interesting, because we can pull up what he said back actually, at the BrICS meeting in August 24 last year.

So this is Foreign Minister Sergey Lavrov. And you can see here he has asked, common account unit is being mentioned increasingly often. President of Brazil, Lula de Silva used it as a plenary session. And did you discuss at the summit any practical details for introducing this common currency? How would it function? Could this really be a quick alternative? He mentions here, nobody is talking now about a common currency.

This point, all attention is focused on mutual trade, economic projects and investments. So he also mentions down here, the five created another project called the pool of reserve currencies long time ago with the establishment of the new development bank. This is a preview to the steps that we are taking to facilitate the use of national currencies and most importantly, to form an alternative payment system. So, again, I think there’s some degree to which paying attention to the specific words there goes a long way, because we also had comments from Sergey Lavrov.

This is in October of last year. Wait, this is. How do you say his name? This is Sergey Glasia, the russian economist and politician, who’s spoken about this quite a bit. And he says, how do you assess the emergence of a new settlement currency with a global function? How realistic? He mentions, I think it is inevitable, because the current monetary and fiscal situation in the world is irrational.

And he mentions, BriCS countries and many other nations across the world are moving to a wider use of national currencies and international settlements because they are all convertible in currency transactions and are no worse than the currencies of the western countries. So why don’t you take it from there and perhaps unravel a little bit of the specifics of what they’re saying there and how that. Let’s start with Glasiev, and then we’ll go back to the first guy, Labrov.

Right. Can you scroll up so I could see a little bit more of the beginning of what Glasiev said, not up at the very beginning where you started reading, there it is. How do you assess. Again, this is about what you said. The words matter. How do you assess the emergence of a new settlement currency with a global function? Okay. When you hear the word settlement spoken at the international level, they mean settlement medium, medium of exchange, or something.

That technically means the deal is done. So no credit, no iOu, not even technically. Some currencies, ultimately, it could be a token that’s backed by gold. It could be the yuan backed by gold. But it has to be something that’s officially recognized as a settlement medium. You want to call it a currency, that’s fine. You want to call it a widget, that’s fine. But the word settlement is extremely important.

Now, the other phrase with a global function, again, that’s not for the common folk like you and me. We’re not going to be able to buy our BRICS currency and go out and swap it for dollars. They mean for global functioning trade. One country again, mercantile system. One country has a running deficit on one day or one month. Wheat versus oil. Let’s say I buy a billion dollars in oil, you sell me $500 million in wheat and there’s $500 million left.

Well, it’s global in the sense that they’re telegraphing to the western world. You’ll be able to trade with us using this currency if we get it global. So it’s regional versus global. It’s not lebs, it’s elite, it’s international money, it’s mercantilism. So that’s the first part. Now that’s the overview of the first part. Now, I think it is inevitable because the current monetary and financial situation in the world is irrational.

All right, that whole paragraph there, he’s saying unipolarity in the dollar. Unipolar currency is no longer needed. All of our countries are no longer children. We can have our own economies. We have our own economies. Our currency should weigh in on the world. And this is the beginning of multipolarity. And we need to come out of the box, have our deputy balls, whatever you want to call it, and get out there.

So there’s no need, according to them, there’s no need for a single point of reference for money, and that’s the dollar. All right, the second paragraph. Yeah, that’s a little wonky. We’re not going to talk about that now. What’s the next paragraph that you wanted me to comment on in there? The BRICS countries, and many are already moving to a wider use of national currencies and international settlements because they’re convertible in transactions and no worse than currencies of the west.

Right. So there are two things you could take away from that. The first thing at the first level is, hey, we’re already multipolar, we’re already using each other’s currencies. Why stop? By the way, that’s the reason to not have a single currency like a euro. There will be no BRICS euro that’s traded commonly. The second thing you could take away from that is, aside from the dig at western currencies, they’re no worse.

They’re all convertible in current transactions now, they are all convertible. You can swap rubles for yuan and there’s an agreed rate, but those markets aren’t deep enough. The FX market has to be deep you can’t just go in there and say, I’m going to convert a billion, a trillion rubles into yuan. It’s not going to happen. You’ll get destroyed because there’s not enough financial depth. That’s what the western is a master at.

So in a good way, if you don’t have the financial depth of liquidity that you need to have these type of huge scale trades, you need to have something anchoring those currencies, rubles for you on. I need to do a bazillion ruble trade for, you know, that’s a lot. I don’t know that we have the liquidity to handle that. And so we’re going to protect ourselves by, number one, backing it with something that’s stable like gold and silver.

Now, I’m not just throwing silver in there because this is silver channel. Silver is on the agenda. Number two, we’re going to put training wheels on our own currencies and let them come out with training wheels to be protected and not be attacked. So we think that our economies are upstanding and ready to go, and we think our currencies need a place at the table. And this is the other thing.

We’re no longer going to Caltel, sorry to use that word, if you’re thinking about this in chinese terms, we’re no longer going to give up our rights to sovereignty by using one nation’s currency. And that’s what they’re saying there. Yeah. And another thing that he mentioned that certainly came across a bit differently than what we heard from Sergey Lavrov. But what are the challenges? What steps need to be taken to introduce? The new interviewer says international currency.

But Sergey Glasiev, we only need political will because technically the currency is almost ready. The software and mathematical tools have been created. Thought that was interesting, just in contrast to here, where he says nobody is talking about a common currency, which may be accurate, although here we’re seeing that software and mathematical tools have been created. Yeah. Okay. That’s an example of what you and I were talking about.

Is there dishonesty there? Is there gamesmanship there? Or is there possibly loss in translation? So I’m going to give you the choices that he could be thinking without making it too crazy. So the first part is, what are the challenges? Okay, first of all, the first phrase you noticed was international currency. He’s using the word. The interviewer is asking international currency, but the international currency, however you want to, whatever words you want to use.

Settlement currency, brick settlement, medium current account, settlement tool, it’s all the same thing. It’s an international currency that they use at the nation state level to close deals, not an international currency that’s going to be handed out at the local bazaar. So that’s the first thing the international currency means, at the very least, something that we can agree on as nation states to settle our current accounts, as in, every month at the most.

It’s something that you can transact business in the street, and that’s not happening, at least not at first. Now, the next part, we need only political will, because technically, this currency is almost ready. The software and mathematics tools have been created. Okay. Without getting into the contradiction at Lavrov, because we’re going to do that as well. Right. But this is where I think there’s some. What’s the word used? A little Pinocchio, a little shenanigans going on there.

I’ve spoken know, I’ve been a follower of Mtrade in the early days, early days, like about two years ago now. And it’s my understanding, and this is complete speculation, it’s my understanding that the currency is not almost ready. It never was almost ready. Okay. The software and mathematical tools have been created yet by the bank of international settlements by the west. They don’t have this set up yet.

It exists, but they don’t have it yet. Now, I want to step back and not abuse him too much on this statement to give him credit. Yeah, the technology is available. The math has been done. That’s not the problem. The problem is we need to agree on what the money is. Is the money oil? Is the money pistachio nuts or toasters, as you and I were talking about.

Is the money gold? What is the settlement medium? The Currency is the piece of paper that says that the settlement medium is toasters or gold. And so I believe that he’s either being willfully insincere to try and sell it, or he’s saying that it’s not that important. What is important is we have to figure out what the actual money a. There’s a woman out there, Kathleen Tyson. She and I have talked about this, and she’s done some recon.

She’s like, they’re not ready on the tech side yet. And you know what? They may not be ready on the tech side, because it’s not important yet. They’ve got to get the other stuff done. Anyway. What’s this sentence here? Well, just in terms of what would actually be used behind that. And here he mentions first basket formed automatically on the basis of pool of foreign exchange reserves. Right.

And then also down in here, talks about the commodity element in there as well. So given some hints of what those would be, and in fact, the last one I wanted to take a look at is here is the golden ruble 3. 0. This was also by Sergey Glasiev, and talks a bit more about gold in here, and mentions the accumulation of fund and soft currencies will increase in the future.

Since this money is also subject to exchange rate, and possible sanctioned risk becomes necessary to sterilize their excess mass. Best way to buy non sanctioned gold in China, Ua, Turkey, possibly other countries. So here he gets a bit more into how gold would be one of those assets in that basket. Certainly that would be heavily involved here. Yeah, it is. Let me answer that and then can we go back to the second part of the whole? What’s going to be in the basket of money? Sure, put this part here.

But since this money is also subject to exchange rate and possible sanctions and risks. Okay, that’s a key point. Okay. You see, if they’re worried about intrusion or interference by a western country with a sanction, or even one of their own countries sanctioning each other, they want to make sure that what’s ultimately behind the money is gold and silver. Why unsanctioned gold and silver? Why? Because it’s unencumbered.

You have my paper, you don’t have my gold and silver. So if there is a problem, it’s not the money that’s confiscated by the west, it’s the paper, and that’s key. But at the same time, they have to be trustworthy with each other. I need to know that the gold is there, and that’s why they need this common international currency. Could you go back to the other Glasgow one, because you touched on something.

I think it’s really important there. It’s the, firstly, by launching international sentiment, the first basket. That’s it, right? The first basket, they’re saying, what is going to create whatever backs up this international currency. Now, again, international currency settlement medium for international trades amongst the BRICS, eventually going out into the world. But it starts with the bricks, right? So the first basket is going to be our own money.

Rubles and yuan and rupees or whatever, right? That’s the first basket. The second basket is a basket of exchange rated traded commodities. Now, this is significant because this is where I picked up on this and actually wrote about it, is that they’re saying that once you agree on, okay, your money is going to be in it, and my money is going to be in it. But now we have to put in something else to offset the fiat, something that’s real.

Well, let’s put in our commodities what you’ll find the conversation we had about toasters, I think should come into this, the second basket. They were trying to come up with something that was real that would help to offset kind of like an SDR, that would help to offset the ephemeral aspect of fiat commodities. And they came up with commodities. And the point was, in this conversation here, this rest of this paragraph is we make the commodities.

We have the commodities. They’re plentiful, and we use each other’s commodities. So why not have commodities in this basket that decides what the ultimate international currency we use is made of? Right, but that created a problem. Yeah. And certainly when he talks a bit more about that back here in the golden ruble 3. 0, interesting. He mentions something I know you’ve talked about a lot. Fixing the price of oil in gold at the level of two barrels for 1 gram will increase price of gold in dollars by two terms.

Calculate the strategist, Sultan Posar, and then also mentions here, gold and silver have been core of global financial system for millennia. Honest measure of the value of paper money and assets. Obviously, he’s not a fan of the. Can we stop right there? See what we just talked about, about the commodities? They’re trying to come up with a way to your oil. My wheat. Right. This is the key.

What you’ve shown is you’ve shown the path to them realizing that only gold and silver work. Okay? So on that other article, it said, we’re going to create a basket of commodities, and that basket of commodities will be added in and we’ll create this international settlement currency on a monthly basis. Some oil, some wheat, some pistachios. And it’s like, wait a minute. And this is where I jumped in with my own analysis before.

It’s like, wait a minute. They’re going to figure out that your oil and my oil are different? Not only are they different, but how we use them is differently. You may be using it to make gasoline and I may be using it to grease axles on cars. It’s what you do with these commodities that makes them valuable. Okay. At this point in that last article, they had to realize, well, if we can’t agree on what a commodity is worth and we don’t all have the same commodities, what’s the one thing that we all have, and what’s the one thing that we all have that we agree on its price.

And what’s the one thing that we all have that we agree on? Its price. That’s not worth using anywhere else because it’s too expensive. And that’s gold. We all have gold. We all value gold the same way. We don’t care about the western exchanges dropping the price of gold. They had an answer to that as well, which is another conversation. And gold is also a commodity. Well, let’s use gold.

And so now you come back to this article and he says, gold. This is their solution. We can’t use oil. We can’t know. What do we say? China buys oil from Saudi Arabia. Saudi Arabia buys wheat from China every month. And at the end of the month, they have to square know. What’s the difference? Well, let’s settle it in oil. Let’s settle it in wheat. Let’s put that in a basket.

You can’t do that. You have to pick something else. Something that’s, a, not confiscatable by the west, b, not sanctionable by the west. Same thing, but same idea, right? C, they all own, they all value, and d, cannot be destroyed or consumed. And that’s gold. Now, he says, along with silver there. And I paid close attention to that, and it was actually the basis of a post that I did after that.

And the answer was following the logic that I was going down and the evolution of their own thought process. All right, we’ll use our own currencies. We’ll use some commodities. We can’t use those commodities. They’re no good. Let’s use gold. Well, not everyone has gold. This is about the time you and I started talking about India buying all the silver. Now, India has a lot of gold, don’t get me wrong, but silver works.

You’re a latin american country with a lot of silver. You’re like, hey, I want it. What’s my silver worth? Well, your silver is worth what it is compared to gold. And the ratio of silver to gold will converge on that. Anyway, first comes gold, then comes silver in these baskets, silver has industrial applications that makes it more volatile and more difficult to use. However, you can’t destroy silver.

It doesn’t go anywhere. It’s limited and it can’t be fabricated. So that’s why silver is going to be involved in it. So what they figured out is we need to create something that ultimately is a settlement medium that we can use to close deals every month to settle out our balances going out back to what, you know, the settled differences in gold. And that settlement medium has to be something that the west can’t take from us.

It doesn’t rust, doesn’t go bad, that’s going to be gold, and then it’ll be silver, and that’s what they’re going to do. Well, that makes a lot of sense. And two last things I just wanted to run by before we wrap up here. The first is Erie did mention, according to Saxobank analysts, 2023, increased demand for the metal will lead to the fact that its price will rise from current 1800 prams to 3000 an ounce.

As a result, there’s real opportunity in the very near future to significantly increase gold reserves by both increasing the physical volumes of gold and by revaluing its value. So he was saying this in 2023. This article was from late 2022. Obviously, we didn’t see move up to $3,000 gold yet. I’ve seen part of the way there, although. Any thoughts on how the increased demand for gold would affect the pricing in the scenario he’s outlining? Sure.

That’s funny that you say that, because I just got a look at a report from Citibank. It’s a very good gold report, and it talks about exactly that concept. And they actually use the number 3000 in it. What they say is central bank demand is not going away. And they pegged it as central bank demand is between 19 and 1950. Now, they’re not chasing it, but they’re there.

Tactically, that’s where they are. And then they said, if the west, specifically the US economy, has a soft landing, then gold should have a year that ends up at 21 50, which I thought was interesting. But the thing that was really interesting is if you look at this Saxo bank analyst comment, what gets gold to $3,000? I’m going to tell you, according to Citibank, what gets gold to $3,000 is another geopolitical black swan.

So, paraphrasing them, the report said they don’t use the word black swan. They use the phrase not outliers. I forget what it is. But they use their own little black swan type of phrase there. And given the risk of more geopolitical uncertainty, for example, the sanctions against Russia, if we start allocating the money there, you could see a $200 move in gold overnight, and that could snowball into a move to $3,000.

So to respond to the Saxo bank analyst, gold doesn’t go to $3,000 without a crisis to get it there. Whether it’s a sovereign crisis, whether it’s a us banking cris, whether it’s an escalation of war. Gold gets to 2500 over the next 18 months. I don’t have a problem with that. But gold doesn’t go to 3000 unless there’s a catalyst that makes people panic. They’re all in on it, trying to buy gold and silver at cheaper prices.

Why would they upset the car? Well, certainly not out of the realm of possibility that we see something like that. And one last thing I just wanted to read before we wrap up here. Perhaps we can dig into this another time. But interesting. He also mentioned, according to the Shanghai Gold Exchange, over the past 15 years, customers have received in physical form 23,000 tons of the metal. India is considered the world’s champion in gold accumulation with more than 50,000 tons.

And mentions obviously there’s been a flow of gold from west to east through London, Switzerland, Turkey. So interesting to hear a russian perspective on some of the gold reserve figures that we see out there. Obviously I think many people who track this believe China has a lot more gold than they actually claim to. Although Vince, perhaps in wrapping up, I know this is the kind of thing you often cover at Goldfix substack, and perhaps you could just let people know where they can find you and be aware of the great research you’re doing there where you dig into a lot of these topics on a daily basis.

Oh sure. It’s vblgoldfix substack. com. Arcadia viewers can subscribe for 30% off discount for the premium membership, but if not, the free one is also just as good. There are a couple of articles that we mentioned, Chris, and I’m going to unlock them for the Arcadia people that touch on this topic as well. Well, appreciate that, Vince. And certainly it’s great that we have someone like you out there keeping a close eye on all the things that are going down in our monetary system, and especially at this particular time where even with a slow start to the year, gold still over $2,000 an ounce, silver possibly maybe bottoming around $23 level.

But I will just mention that you and I have been talking about something else that we’ll be having you do on the show, which we’ll leave a secret for now, although coming soon that I think people really enjoy, and it’s been a true pleasure and an honor having you as part of the channel. So thank you for all you’re doing, Vince, and we’ll look forward to catching up with you again soon.

Thanks for having me and I love doing it. Well, thank you Vince, for everything that you shared there and thanks at home for watching. Hopefully that helped to explain a little bit more some of the semantics going on in this ongoing discussion of what the BRICS will do, how they will connect some of the different countries to make the payment system less based on the dollar and us treasuries and facilitate international trade as we continue to see that movement taking place.

So in wrapping up, would also like to thank First Majestic Silver who released their exploration results at Sandimas, Santelane and Jarrett Canyon last week. I will link to a video that walks through the highlights of that that will come your way in just a second and also wanted to mention that first majestic does have their earnings and dividend announcement coming up this week on February 22, which is Thursday, so obviously want to be staying tuned for that.

And we’ll have an update about that later this week as well. So hope you’re having a great day out there and your week is off to a great start and we will see you again tomorrow. .

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