Whisperings of a New Gold-Backed Global Currency could decimate the greenback and euro

[sullivan]

Whisperings of a New Gold-Backed Global Currency From the BRIC Countries Could Decimate Both the U.S. Dollar and the Euro

From Daily Dose

With the BRIC (Brazil, Russia, India, China) economies in much stronger shape domestically compared to the sickly U.S. and their respective markets already pricing in much of the coming collapse yet to really hit the U.S. stocks I wonder when these countries will band together to form a new currency of their own? They may as well, since many global financial instruments already treat them as an economic unit (case in point).

And if these countries were to form a new global currency that's 100% backed by gold (like the U.S. dollar was from 1792 to 1971) then I suspect we would witness a global stampede out of Euros and U.S. Federal Reserve Notes into this new golden currency backed by the strongest economies across the globe. Why not call the new currency a bric? In English, the name alludes to something concrete, sound, stable, and badly needed in these uncertain times. The gold-backing shouldn't be B.S., though. Any Tom, Dick or Harry needs to know he can go to the bank with a Bric note and know he can walk out with gold.

From Brazil: Although its stock market is beaten up, its domestic economy is still very strong.
Brazil expects the odd sniffle, but nothing serious

Brazil has not decoupled itself from the rest of the world: its stock market has fallen fairly much in line with other markets but, unlike in the past, the turmoil elsewhere has not been amplified.
Brazil has been able to maintain foreign reserves in excess of $200bn to help it weather the storm.

From Russia: Now a major player in the world energy scene, Russia's central bank has recently been stockpiling gold.
Time for a gold rouble?

The decision by the US government to inject $700 billion into the financial system means that the already gigantic annual budget deficit of the American state (previously some $450 billion a year) will now rise by a factor of three. The total state debt of the USA will rise to well over $11 trillion. It is obvious that such a colossal debt can never be repaid.

Russian leaders might also consider making their own currency, the rouble, convertible into gold.

From India: The World Gold Council says that Indian citizens possess the most personally-owned gold in the world. And that love for gold is now stronger than ever.
Indian customers lured by gold's lower price

UBS, one of the largest gold exporters to India, says it has seen a spike in sales. John Reade, UBS metals strategist, says that the near-absence of jewellery demand in India between August 2007 and July left the local market largely de-stocked, "hence the tremendous pickup in demand over the past five weeks."

From China: Also big gold lovers, the Chinese government is now openly questioning the use of U.S. Dollars as the default world currency.
China paper urges new currency order after "financial tsunami"

Threatened by a "financial tsunami," the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.
"The world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States."