Bringing the financial system into the 21st century

The respective governments would guarantee full convertibility of their currency against one, two or three of the commodities.

That is gold, silver or platinum could be exchanged against any of the four reserve currencies.

The four currencies would be fixed in value against each other. The process for revaluation of reserve currencies will be explained later.

Each nation’s currency would be set against each of the reserve currencies with a tolerance of 3 per cent. Each nation’s monetary authority would be required to buy/sell their currency to maintain its value against all four reserve currencies within this prescribed range.

The process for revaluation of national currencies will be detailed later.

Currency re-evaluation process

To oversee the Bretton Woods institution there needs to be an economic security council consisting of 15 member nations with nine permanent members and six rotating members.

The nine permanent members would be the United States, the European Union, China, India, Japan, Brazil, Russia, United Kingdom and South Africa. The six rotating members would come from Asia (including Oceania) with two seats, Europe with two seats, Africa with one seat and the Americas with one seat.

For a change in either the value of one of the reserve currencies or the reserve commodities it would require an absolute majority of the council with seven of the nine permanent members concurring.

For a change in the value of any nation’s currencies only a simple majority would be required provided that nation could show a major disequilibrium in current account.

Reform of agricultural trade

Central to any new international finance system is the need to reform the corrupt trade arrangements in the agricultural sector.

The removal of all trade tariffs and quotas in agriculture would be a requirement of the new financial system.

The power to declare a list of agriculture commodities as essential goods would be provided to the economic security council. Changes to the prescribed list would require an absolute majority along with seven of the permanent members concurring.