BRICS kick starts $100bn reserve currency pool (or bye-bye reserve petro dollar...)

Published time: July 08, 2015 09:17
Edited time: July 08, 2015 10:01

http://rt.com/business/272362-brics-currency-pool-agreement/

Participants in the BRICS Finance Ministers and Central Bank Governors’ Meeting, Meeting of the Board of Governors of the BRICS New Development Bank (RIA Novosti / Vladimir Fedorenko)

The Central banks of BRICS countries have signed an operating agreement on the currency reserve pool, according to Central Bank of Russia. The $100 billion pool aims to protect BRICS member states from currency volatility shocks.
BRICS/SCO summits in Russian city of Ufa LIVE UPDATES
The agreement was signed Tuesday in Moscow after the meeting of the Finance Ministers and Chiefs heads of the Central Banks of BRICS, the statement of the Central Bank of Russia (CBR) said. It contains a detailed description of the procedures which are carried out by the central banks of BRICS states – the emerging economies of Brazil, Russia, India, China and South Africa - within the currency reserve pool, defines their rights and duties.
It will come into force on 30 July, according to the CBR head Elvira Nabiullina. She added that several other documents will be adopted to regulate the operation of governing bodies - the Governing Council and the Standing Committee.
China will make the biggest contribution to the pool: $41 billion. Russia, Brazil and India will donate $18 billion each, while South Africa’s investment will be $5 billion.

Read morePutin ratifies BRICS $100bn currency pool deal

Nabiullina explained that so far the money remain on the banks’ balance sheets and will be unlocked as soon as any of the BRICS member states ask for help.
In May, Russian President Vladimir Putin ratified a deal to establish a $100 billion foreign currency reserve pool for the BRICS group.
Last July, Russia, Brazil, India, China and South Africa signed the document to a reserve currency pool worth over $100 billion as well as $100 billion BRICS Development Bank.
The goal of the pool is to give BRICS member states opportunity to provide each other financial assistance in case of problems with their balance of payments.
Earlier, Putin said that Russia expects to launch the $100-billion BRICS New Development Bank along with a currency reserve pool at the BRICS summit in Ufa, Russia, which kicked off Wednesday.

What Is A Gold Standard?

Submitted by Tyler Durden on 11/16/2013 19:22 -

Given our earlier discussion of Nobel winner Sargent's comments on Greece and the gold standard, and the ongoing melt-up in asset markets due to the 'limitless money-printing' of central banks around the world, we thought it worth a look at what a gold standard is (and is not). Before 1974, U.S. dollars were backed by gold. This meant that the federal government could not print more money than it could redeem for gold. While this constrained the federal government, it also provided citizens with a relatively stable purchasing power for goods and services. Today's paper currency has no intrinsic value.

It is not based on the value of gold or anything else. Under a gold standard, inflation was really limited. With floating value, or fiat, currency, however, some countries have seen inflation reach extremely high levels—sometimes enough to lead to economic collapse. Gold standards have historically provided more stable currencies with lower inflation than fiat currency. Professor Larry White asks, should the United States return to a gold standard?

 http://www.zerohedge.com/news/2013-11-16/what-gold-standard