There is hope. Between Republican control of both chambers of Congress and President Donald J. Trump reentering the Oval Office in three weeks, it’s not time to panic. But there needs to be real actions taken to not only raise the debt ceiling but to dramatically cut spending. Unfortunately, the latter may not be in the cards.
The United States is on a collision course with a potential default on its national debt, an event poised to significantly undermine its credit rating and unleash economic turmoil across global markets. This looming crisis is centered around the contentious issue of the debt ceiling, sparking widespread concern among investors, policymakers, and international allies.
The federal debt limit, due to be reinstated on January 1, 2025, sets the stage for a critical financial challenge. With the Treasury Department’s extraordinary measures expected to deplete by mid-2025, there’s an urgent call for Congressional action to either raise or suspend the ceiling to avoid default. Treasury Secretary Janet Yellen has highlighted the gravity of the situation, urging lawmakers to protect the full faith and credit of the United States.
A default would not only question the reliability of U.S. Treasuries, traditionally seen as the bedrock of international finance with zero credit risk, but also lead to a potential sell-off of U.S. securities. Such an event could increase borrowing costs globally and might even push the U.S. into a recession, affecting millions of jobs and household wealth.
This is the path through which de-dollarization can ascend. BRICS nations have diligently been working to usurp the U.S. Dollar with their own currencies. Meanwhile, non-BRICS nations who have relied on the U.S. Dollar are seeking cover. This is why alternative forms of value such as cryptocurrency and precious metals are becoming increasingly popular.
Historically, the U.S. has faced similar scenarios, like in 2011 when political brinkmanship led to a downgrade of the U.S. credit rating by Standard & Poor’s. Although the situation was resolved before reaching default, the mere threat caused economic ripples. The implications of a 2025 default could be far more severe, with Moody’s already signaling a negative outlook on U.S. debt amidst rising deficits and interest rates.
The global economy’s reliance on U.S. economic stability means that any default would have far-reaching effects. Countries with economies tied to the U.S. dollar could see their own financial systems destabilized, and the trust in U.S. financial instruments could wane, leading to a reevaluation of global investment and trade strategies.
In response, some experts advocate for structural reforms to manage U.S. debt more sustainably, while others emphasize the need for immediate, bipartisan action in Congress to avert the crisis. The situation underscores the delicate balance between fiscal policy, political will, and economic stability, highlighting the stakes involved not just for America but for the world’s financial landscape.
To those seeking to protect their life’s savings with physical precious metals, request a 2025 Wealth Protection Kit from Genesis Gold Group.
Article generated from corporate media reports.
]]>This is according to proclamations by Russia’s executive director for the International Monetary Fund, Alexey Mozhin. He said that the downfalls of the current financial system are growing more obvious and pointed out how BRICS could step up in such an event and provide a viable alternative.
According to Mozhin, BRICS member countries could develop a currency based on those of its members, including the Indian rupee, the Chinese yuan, the Brazilian real, the South African rand and the Russian ruble.
He told the media: “Such a proposal is being discussed. In the event of the collapse of the dollar and the international monetary system, it will be necessary to turn the said BRICS accounting unit into a real currency, backed by exchange goods.”
There has been widespread support among BRICS nations and other countries for moving away from the dollar in favor of national currencies. The bloc is also reportedly looking into digital currencies as a means of providing more mechanisms for trade.
The idea is to reduce their vulnerability to fluctuations in dollar exchange rates and reduce the impact of financial sanctions from the West. This was on full display when the Western financial system cut Russia off after the Ukraine conflict broke out in 2022. Some observers feel that developing a common currency will be an uphill battle given the many geographic, political and economic disparities between the BRICS member nations.
However, leaders like Brazilian President Luiz Inacio Lula da Silva said that countries that do not use the dollar should not be compelled to trade with each other using the currency. At a summit last year, he explained that a BRICS currency “increases our payment options and reduces our vulnerabilities.”
BRICS could end the dollar’s dominance even without a shared trade currency
Even without a shared trade currency, the bloc could still swing an “economic wrecking ball” at the dollar’s dominance, according to former White House economist Joe Sullivan. He said that although BRICS nations have denied that a rival currency is imminent, the bloc of other emerging market countries that have been invited to join their ranks, such as Iran, Saudi Arabia, United Arab Emirates, Ethiopia, Argentina and Egypt, could pose a big threat to the dollar as their influence grows.
In fact, with Saudi Arabia, Ethiopia, and Egypt – three countries that surround the Suez Canal, a vital passageway for goods flowing into international markets – joining, BRICS would then have an influence over 12% of all global trade. Meanwhile, with Iran, the UAE and Saudi Arabia sitting among the biggest global exporters of fossil fuels and Russia, China and Brazil as major precious metal exporters, the bloc could have significant sway in the commodities markets.
He stated: “The BRICS+ nations do not need to wait until a shared trade currency meets the technical conditions typical of global reserve currency before they swing their newly enlarged economic wrecking ball at the dollar.”
The Chinese yuan is already pushing out other currencies in trade as its trading partners increasingly use it, and this could see the dollar lose its stronghold.
“The BRICS+ states do not even necessarily need to have a shared trade currency to chip away at King Dollar’s domain. If BRICS+ demanded that you pay each member in its own national currency in order to trade with any of them, the dollar’s role in the world economy would go down,” Sullivan added.
With BRICS member states now being more open about moving away from the dollar and trading in national currencies or developing their own currency, it’s time to prepare for the reality that full dedollarization may happen sooner than once believed.
SEE ALSO: CBDCs, BRICS, and De-Dollarization Efforts Accelerate Ahead of a Possible Return of Trump
Sources for this article include:
]]>South African International Relations Minister Naledi Pandor confirmed the full membership of Saudi Arabia, Iran, Egypt, Ethiopia and the United Arab Emirates (UAE) during a Jan. 31 press briefing in the capital Pretoria. The five nations accepted the invitation from the BRICS core group extended during a summit last year. She also told members of the media that Russia, which takes over as the group’s chair from South Africa, has received written interest from 34 countries that want to join.
According to Pandor, Argentina has been accepted as a full member of the BRICS group. However, Argentinian President Javier Milei reversed course and instead strengthened relations with the West. “Argentina has written to indicate that they will not act on this successful application by the previous administration to become full members of BRICS, and we accept their decision,” she said.
The South African minister added that she and her colleagues in the group are developing a so-called BRICS partner country model. This model, Pandor said, would accommodate 17 nations that weren’t accepted as full members.
Moreover, she mentioned that the group is also devising a framework to allow members to use their local currencies for inter-BRICS trade. According to her, the group found the current international payment system that uses the U.S. dollar to be “unfair and costly.”
Ullas Rao, an assistant professor at Heriot-Watt University‘s Edinburgh Business School, noted that the inclusion of Riyadh and Abu Dhabi in BRICS is a “particularly noteworthy” development. With the two oil giants’ substantial sovereign wealth funds, they are poised to create significant growth opportunities in BRICS through investments, trade and commerce.
“The expansion of the BRICS multilateral bloc to include Saudi Arabia and the UAE augurs extremely well, amid ongoing geopolitical and economic challenges confronting the world economy,” he told Economy Middle East.
BRICS grows to 10 members from initial 5 core countries
According to Bloomberg, leaders of the five core BRICS nations – Brazil, Russia, India, China and South Africa – “agreed to enlarge their BRICS group from Jan. 1 at a summit held in Johannesburg in August” of last year. The inclusion of the five new members, which expands the group to 10 nations, took effect on the same day as Russia assumed BRICS’ rotating chairmanship.
Russian President Vladimir Putin welcomed the five new member nations in an official statement. He said: “BRICS is attracting an ever-increasing number of supporters and like-minded countries that share its underlying principles – namely, sovereign equality; respect for the chosen path of development; mutual consideration of interests; openness; consensus; the aspiration to form a multi-polar international order and a fair global financial and trade system; and pursuit of collective solutions to top challenges of our time.” (Related: Saudi Arabia fortifies relations with Russia, thumbing its nose to the West.)
Ayham Kamel, head of the Middle East and North Africa research team for consultancy firm Eurasia Group, commented on the development. He specifically zeroed in on the inclusion of Riyadh, Abu Dhabi, Tehran and Cairo in the BRICS group.
“The prospect of Saudi Arabia, the UAE, Iran and Egypt joining BRICS creates new mechanisms that force a degree of political cooperation by all the countries,” Kamel said. “The Arab countries are looking [to improve] their global geopolitical influence.”
Head over to DeDollarization.news for more stories about BRICS. Watch Gregory Mannarino explains why Saudi Arabia’s BRICS membership poses a direct threat to the petrodollar.
This video is from the High Hopes channel on Brighteon.com.
More related stories:
- Saudi Arabia, UAE and Iran among six countries invited to join emerging BRICS global superpower.
- Dollar dominance scheduled for TERMINATION as Saudi Arabia declares CHINA its “reliable partner.”
- China bank collapse under way; Saudi Arabia distances from the petro dollar to join BRICS monetary order.
- BRICS to lay foundation for EXPANSION: 13 Nations formally asked to join group, 6 others expressed interest.
- End of petrodollar edges closer as Saudi Arabia looks set to join new China-dominated ‘BRICS’ economic alliance.
Sources include:
]]>At the meeting Siluanov met with Lan Fo’an, his Chinese counterpart, to discuss new ways to facilitate making trade payments in local currencies rather than the U.S. dollar as part of a long-term de-dollarization strategy that aims to unseat America from global trade dominance.
“We need to further develop financial cooperation within the BRICS countries,” Siluanov added. “Here we see opportunities … to develop a payments system that would be independent of the infrastructure, which does not always fully fulfill the goals of individual countries.”
“Therefore, the sustainable development of financial relations and settlements on the BRICS platform is important for us, and we believe that it is necessary to work out such issues, and today we will consider a number of them.”
(Related: Check out our earlier report about Russia’s upcoming plans to release a new BRICS currency to compete with the dollar – it should be ready by next summer, Russia says.)
The U.S. dollar won’t be king for much longer
Many BRICS partners are already making trades with local or alternative currencies after sanctions stemming from the war in Ukraine effectively cut Moscow off from the Western financial system.
Rather than kowtow to Western demands, Russia and its partners have instead been laying the groundwork for a new world order that will eventually cut off the West from global trade after the U.S. has been unseated as the global economic superpower.
Communist China is quickly rising to the top of the trade heap with all of its cheaply made junk, and Russia is helping it and the other BRICS member nations further dethrone the U.S. by encouraging financial transactions in other currencies.
“Ditching the dollar is the only sane thing to do to establish multi-polar prosperity for non-dollar nations,” wrote one commenter at RT in favor of Russia’s agenda.
“Ditching the dollar as fast as they can will liberate their economies,” wrote another.
“The U.S. dollar has become a weapon of mass destruction to the world,” suggested someone else. “Money should be a produce of labor, not debt labor.”
One idea for BRICS, as proposed by someone else who left a comment, is for member nations to use a basket system of only member-state currencies, all of which have to be backed by gold.
“And no member may use the U.S. dollar in their international trade,” this same person added. “I think this will work out well for BRICS and poorly for those who think that this will never happen … because it will (one day).”
“Previously, the world was using the U.S. dollar due to convenience and free will,” said another. “And now they will stop using it since it has been repeatedly weaponized.”
“The smart countries will not be swayed by any USA concessions or curveballs.”
Another wrote that ditching the dollar is a top priority. BRICS needs its own reserve currency and independent SWIFT system, as well as its own shipping, insurance and international lending mechanism in order to out-compete the dollar and complete the de-dollarization process.
“However, the goal must not be to completely ditch the dollar or euro, but to have an alternative because competition is the best because what if BRICS itself becomes arrogant with members?” this person added.
How much longer will the United States be top dog on the world stage? Learn more at Collapse.news.
Sound off about this story on our Economic Collapse Substack.
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]]>According to data from SWIFT, the global messaging service for cash transactions, use of the euro has collapsed over the past nine months. Its share of transactions dropped from 38 percent in January to a measly 23.2 percent at the end of August – this is the lowest level recorded in at least 12 years.
It is now being acknowledged that Europe is more than likely already in a recession. And based on the old standards of calculating a recession, the U.S. is likewise in a recession – and heading towards a great depression that will be much worse than the first one.
All gains made by the euro from December 2022 through July 2023 have now been lost. And since mid-July, the common currency has lost another eight percent against the dollar – and is likely only just getting started in terms of its continued decline.
(Related: Back in August, India and the United Arab Emirates [UAE] completed their first dollar-free sale of oil in rupees rather than in petrodollars.)
The global economy is grinding to a halt as inflation continues to soar
Based on the new standards, the U.S. is expected to “officially” enter a recession in 2024 as the effects of monetary tightening take their toll. Some believe that the dollar will hold roughly steady through the winter months before dropping off a cliff next year.
As poorly as the U.S. is doing right now economically, the Eurozone is reportedly doing much worse. There, growth momentum is declining at the most rapid pace, while the U.S. economy has seemingly magically continued to “hang in there.”
Factory job losses across Europe are increasing as new orders decline and business confidence deteriorates. In its 26-year history, the Eurozone HCOB PMI report has never seen this severe of a decline in new product orders across Europe.
The European car sector is struggling as well, and EU leaders have launched their own probe into illegal state subsidies in the Chinese car sector. It remains to be seen what will become of the trade relations between the EU and China moving forward.
“At the end of the day, we believe that the most likely scenario is a negotiated settlement that would either result in some protective measures and / or entails an agreement on Chinese investments in Europe in either the car or the battery sector,” reported Zero Hedge.
The European Commission says it will also assess the risks of four critical technologies: semiconductors, artificial intelligence, quantum technologies and biotechnologies such as vaccines and genome sequencing. The aim is to ensure that these technologies are not “being weaponized by countries not aligned with its values.”
For the first time since April, there has also been an acceleration in the rate of inflation both here and abroad. There have likewise been substantial increases in energy prices, particularly during the month of September.
“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks,” reads a statement from Reserve Bank of Australia (RBA) head Michelle Bullock about the dire situation there.
All in all, the global economic climate is getting uglier and uglier as it nears falling off a cliff, never again to return to what it once was.
The end of Western dominance over world affairs is now in sight. Learn more at Collapse.news.
Sources for this article include:
]]>He said that since the dollar was taken off the gold standard in line with President Richard Nixon’s series of economic measures undertaken in response to increasing inflation in 1971, the U.S. dollar became debt. “Yet people are so indoctrinated into working for this (dollar), and saving this and investing this for more paper. That makes no sense to me,” the author of the no. 1 financial awareness book “Rich Dad, Poor Dad” told hosts Mike Adams and Todd Pitner during his September 26 appearance on “Decentralize.TV.”
Here is what he does, he said: “Number one, I don’t save money, I save silver and gold. I also use debt to invest.” He further recommended that the public study because when any “freaking idiot” can buy an Apple share, he just calls his stockbroker up and says, “I’ll give you $100, you get that share of Apple.” But he warned that once something “bad happens,” the money can be liquefied that fast. “But if you buy a piece of real estate for $100,000 and you make a mistake, you’re not going to write that baby down.”
He cited his friend Ken McElroy’s book “The ABCs of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss,” which provided an advanced guide to real estate. “Let’s say I buy a property for a million dollars and I borrow out the $2 million. The property now is 100 percent debt and the company is still throwing cash flow,” he said pointing out that when one has cash flow from nothing, the return is infinite. “You made money out of nothing? Yeah, that’s what financial education is,” he added.
Segueing to self-custody and decentralization, Adams raised the value of gold, silver, and cryptocurrency. “Crypto is an honest ledger, right? No one can artificially inflate the supply of Bitcoin, gold and silver in inherent intrinsic value that outlast the fall of civilization throughout history. And also, you can’t just create gold out of thin air, it takes a lot of effort and energy to get it,” the Health Ranger stated.
Kiyosaki agreed saying, that crypto – Bitcoin especially – is off the grid and that is why he likes it. “But it’s blockchain technology, which has integrity. Meanwhile, the U.S. Treasury and President Joe Biden have no integrity,” the renowned author said. “So I want something you cannot print. And that’s why I like gold, silver, and Bitcoin.”
The founder of Rich Global LLC and Rich Dad Company, a private financial education company, further backed it up with the impending death of the U.S. dollar as the BRICS (Brazil, Russia, India, China, South Africa) nations have been expanding with the joining of Saudi Arabia and 41 other countries also expressed their intent to be part of the emerging economies. (Related: Robert Kiyosaki warns of impending DOLLAR DEMISE amid BRICS group’s gold-backed crypto plan.)
“With this, the world doesn’t have to use the dollars,” he said looking back in 1944 when USD became the reserve currency of the world. “It was as good as gold then because the U.S. had won World War II and all central banks had to store this in their vaults, like quadrillion dollars sitting in vaults of the Bank of Japan, Bank of Mexico, Bank of England, etc.” So, when the BRICS coin comes in perhaps quadrillions of dollars flood back to the United States, because it’s no longer money, it is going to cause hyperinflation.
How the United States lost powerful nation’s support such as Saudi Arabia
Kiyosaki, meanwhile, said that it is not just Biden’s strong push for the stupid green agenda that alienated Saudi Arabia from the United States. He said that another straw was when the current administration pulled out of Afghanistan. Also, the Bank of International Settlements made gold a tier-one asset. He said: “Up until that time, the USD was a petrodollar. When Biden pulled us out of Afghanistan, the dollar became worthless, it wasn’t worth oil anymore. So, Saudi Arabia says, ‘Why are we backing the United States?'”
Kiyosaki further expressed his observation, after providing a disclaimer that he was not a racist or xenophobic. “If you notice most of the countries that are hanging together are Christian – Canada, America, England, Australia, New Zealand – but Saudi Arabia, Iran, and Iraq, they’re Muslim, while Korea and all the other Buddhists are together. So not only is it race and money, it is by different religions as well. And I think this is going to be the biggest change in overall history.”
The finance expert also warned people of the rumor that there can be a bail-in, which for him is another level of insanity. “But I would take my money out of the bank. I won’t tell anybody where I keep it. I bought a safe someplace. I store my gold and silver in Switzerland because I don’t trust my government,” he revealed.
Adams concurred and added that the future for the American people is going to surprise them because they will find themselves living in deep impoverishment virtually overnight. “Even if they have dollars in the bank, or they think they have a pension or they think they have Social Security. Yeah, you may still get the check, but it’s not going to be able to buy much of anything,” the Brighteon and Natural News founder said.
Check out DollarDemise.com for more news about the imminent collapse of the U.S. dollar. Watch the full September 26 episode of “Decentralize.TV” with Mike Adams and Todd Pitner featuring Robert Kiyosaki below.
This video is from the Health Ranger Report channel on Brighteon.com.
Sources for this article include:
]]>(Article cross-posted from Natural News)
Just the other day, in fact, India reportedly purchased an order of oil using rupees instead of Federal Reserve Notes, which are still – but not for much longer – the primary foundation of global trade, especially for earth-based “fossil” fuels like oil.
According to reports, the United Arab Emirates (UAE) signed an agreement allowing not just India but all the rest of the BRICS members to buy and sell oil in rupees, which is really bad news for the U.S. economy.
For now, the U.S. dollar is still the global reserve currency, meaning it is the standard currency used for trading important commodities. This is systematically changing, though, and America’s politicians seem to be asleep at the wheel when it comes to protecting American interests in this regard.
(Related: According to Russian President Vladimir Putin, the global de-dollarization process is “gaining momentum” – and once complete, it will be “irreversible,” he says.)
China signs $582.3 billion worth of global currency settlement agreements that will exclusively use YUAN, not dollars, to trade
Indian Oil, a prominent energy company in India, purchased one million barrels of oil from the state-owned Abu Dhabi National Oil Company, following the lead of the UAE itself which back in March purchased 65,000 tons of liquefied natural gas (LNG) from Chinese oil and gas company China National Offshore Oil Corporation using the Chinese yuan currency.
It would seem as though the rest of the world has had enough of U.S. currency dominance. Since the Federal Reserve is printing dollars into absurdity, diluting the currency and rendering it worthless, the rest of the world is switching to other currencies instead.
The media and your favorite politicians will never tell you the true cause of all the inflation we are seeing, by the way, which is a result of many decades’ worth of corporate socialism and bailouts, as well as Wall Street corruption.
As the dollar continues to lose dominance abroad, expect a lot of blame game taking place. The Republicans will blame the Democrats for inflation and the always-rising deficit while Democrats will blame Republicans. Meanwhile, neither wing of the uni-party will identify the true snake: the money-changers and their private central banking scam.
Either way, the U.S. dollar is on the way out, and most Americans seem to be none the wiser as they gorge themselves on mindless entertainment, LGBT perversion, social media “influencers,” and all the rest of the bread and circuses that the money masters are dangling in front of people to distract from the soon-coming collapse.
Back in May, by the way, communist China signed a $582.3 billion deal covering an extensive variety of currency settlement agreements. Once again, instead of the U.S. dollar, those more than half-a-trillion-dollars’ worth of agreements will exclusively use the yuan, rather than the dollar, to trade.
“The UAE is one of the countries that inked the deal with the Asian giant along with Russia, Venezuela, Oman, Bahrain, Qatar, Kuwait and Saudi Arabia,” reports explain.
Keep in mind as well that at the recent BRICS summit in Johannesburg, membership to the BRICS alliance was extended to six additional countries, which would increase its membership ranks from five nations to 11.
How much longer will the U.S. dollar, which is backed by absolutely nothing, remain the official global reserve currency? Learn more about what is soon to come at Collapse.news.
Sound off about this development on our Economic Collapse Sustack.
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]]>
Brazil, Russia, India, China and South Africa (BRICS), a group of emerging countries combatting traditional Western dominance, added six new member countries, it announced at its summit on Thursday.
Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the UAE are the six new countries BRICS welcomed into the coalition and they will become official members on January 1, South African President Cyril Ramaphosa said at the summit hosted in his country, according to Reuters. Leaders of the original BRICS countries described the historical and geopolitical significance of the new member additions and suggested this is only the beginning.
“BRICS has embarked on a new chapter in its effort to build a world that is fair, a world that is just, a world that is also inclusive and prosperous,” Ramaphosa said, according to Reuters. “We have consensus on the first phase of this expansion process and other phases will follow.”
Dozens of other countries including Bolivia, Cuba and Kazakhstan also want to join BRICS, according to Reuters.
“This membership expansion is historic,” Chinese President Xi Jinping, said, according to Reuters. “It shows the determination of BRICS countries for unity and cooperation with the broader developing countries.”
Russian President Vladmir Putin did not attend the summit because of an International Criminal Court arrest warrant for his alleged crimes in Russia’s war with Ukraine, according to Reuters.
“BRICS is not competing with anyone,” Putin said in remotely recorded remarks, according to Reuters. “But it’s also obvious that this process of the emerging of a new world order still has fierce opponents.”
The BRICS coalition, which has expanded to encompass 11 nations, consists of a combined population of 3.7 billion people including three authoritarian states, two autocratic monarchies and a theocracy, according to The New York Times.
Representatives from several countries railed against the dollar, suggesting a desire to decrease dependence on the U.S. currency at the summit on Tuesday, according to reports.
Sound off about this development on our Economic Collapse Substack.
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]]>(Article cross-posted from Natural News)
This is according to financial expert and analyst Andy Schectman, who recently spoke with Kitco News to discuss the South African government’s recent revelation that some 40 or so nations are gearing up to submit their formal applications to join BRICS.
Schectman noted that the developing world is creating multinational institutions that are steadily growing in power and influence to the point that they may one day be able to threaten America’s global financial hegemony. Schectman pointed to programs and organizations like the Belt and Road Initiative, the Eurasian Economic Union, BRICS’s own New Development Bank and the Shanghai Cooperation Organization.
“If you put together the Belt and Road Initiative, the BRICS, the Shanghai Cooperation Organization and the Eurasian Economic Union, you’re d–n near close to 85 percent of the human population,” he said. “What they’re doing is they’re being very methodical in the way that they’re laying the groundwork, the foundation to when they flip the switch.”
“And so whether or not we see a [BRICS] currency in a few weeks or a few months or next year, to me the alliance that’s being built, this alliance that represents the majority of the human population that is not going green [U.S. dollar], it’s a very big deal,” Schectman added. (Related: BRICS bloc’s proposed gold-backed currency could spell an END to the US dollar.)
22 Nations formally applying to become full BRICS members
South Africa’s ambassador to the BRICS bloc, Anil Sooklal, recently informed journalists that 22 nations have formally applied to join the organization.
This announcement comes just days before BRICS is about to hold a summit in South Africa’s main commercial city of Johannesburg, due to take place on Aug. 22 to 24 and without the attendance of Russian President Vladimir Putin.
“Twenty-two countries have formally approached BRICS countries to become full members. There’s an equal number of countries that have been informally asking about becoming BRICS members … [including] all the major global south countries,” said Sooklal.
Some of the countries that have publicly expressed their interest to become full-fledged members of the economic union are Argentina, Bangladesh, Comoros, Cuba, the Democratic Republic of the Congo, Gabon, Iran, Kazakhstan, Saudi Arabia and the United Arab Emirates.
The growing interest in membership to the BRICS group is “nothing new,” said Sooklal, but it does underline the “confidence” that the world has in the work that BRICS nations have done in “championing” the economies of the developing world since the group’s inception.
“The BRICS are not only the driving force of global strength in trying to change the fault lines in terms of global politics, they are also changing what happens in the global economic space,” said Sooklal. “The current global architecture continues to be unequal, continues to marginalize developing countries … and continues to be dominated by a few hegemonies. We want a world where our voices are heard.”
Sooklal noted that BRICS is now being seen more as “a powerful force,” adding that, measured by purchasing power parity, the bloc now accounts for nearly 32 percent of the global GDP – a level that officially overtakes the G7 group of so-called advanced democracies that includes the United States.
Mikatekiso Kubayi, a researcher for the Institute for Global Dialogue at the University of South Africa in Pretoria, noted that BRICS’s many achievements make joining the bloc a very attractive prospect.
“You will recall that from the onset BRICS was an outfit that was easily dismissed by many, particularly in the West, seen merely as some concept,” said Kubayi. “But it has achieved a lot, you know, in the 15 years that it’s been around.”
Kubayi’s examples include the creation of the New Development Bank and its programs and policies for looking at alternative ways of conducting trade and promoting the use of local currencies.
Learn more about the coming end of the U.S. dollar at DollarDemise.com.
Watch this clip from Kitco News as financial expert Andy Schectman discusses the possibility that 85 percent of the global population could dump the U.S. dollar.
This video is from the Thrive Time Show channel on Brighteon.com.
More related stories:
- Robert Kiyosaki warns of impending DOLLAR DEMISE amid BRICS group’s gold-backed crypto plan.
- Putin to skip BRICS Summit in South Africa, eluding potential ICC arrest.
- USD dominance will substantially weaken with BRICS launch of a gold-backed cryptocurrency.
- Macron asks for invite to August BRICS summit in South Africa – but adding France could create FRICTION within the group.
Sources include:
]]>Throughout the 1990s and into the early dawn of the 21st century, national governments looked down upon a world they credited themselves with creating. A Federal Reserve-engineered ‘soft landing’ in the mid-1990s buttressed the perception of monetary policy as a perfectable science.
The Third Way – not free markets, but a hampered, highly regulated mixed economy – had outlasted and arguably defeated Communism. Technological innovation was vaulting beyond anyone’s wildest expectations. Space was at the forefront of science again, with the launch of the Hubble Space Telescope and construction starting on the International Space Station. Protease inhibitors, bioengineered foods, and the first hybrid vehicles arrived.
US Dollar Index (DXY), Fall of USSR – present
At that time political figures all around the globe, elected and appointed, surveyed a world built upon paper money and financialization. They looked upon it with great, in many cases smug, satisfaction. And among other self-congratulatory measures, they began selling their long-held gold reserves – by the ton. England, the Netherlands, Australia, Belgium, Canada, and even precious metal stalwart Switzerland liquidated physical stocks of gold. The US did as well, a bit later. Some explained those sales as a means for diversifying central bank holdings. Others claimed that the proceeds would benefit the poor or be used to pay down government debt. A new millennium was at hand, the towpath to which was paved not by soft yellow metal but by batteries of workstations armed with Pentium III processors, silently churning out solutions to partial differential equations.
Twenty-five years later the poor are still poor, national debt is at record levels, and the price of gold in US dollars is eight to ten times the price that governments and central bankers sold almost 5,000 metric tons for. Multi-trillion dollar wars have been fought to inconclusive ends: not lost, really, but far from won. Orders of magnitudes typically only found in astronomy textbooks, invoking trillions (and in Japan, quadrillions) regularly surfaced in the descriptions of monetary and fiscal policy measures of developed nations. Then, on the heels of a highly politicized response to a public health event, inflation returned from a four decade sojourn. One dollar printed during the Y2K scare today purchases roughly 56 percent of what it did then.
Nevertheless, the US dollar has remained the indisputable and essentially singular global reserve currency, acting as a medium of exchange, unit of account, and settlement instrument for the lion’s share of daily international trading.
Despite policy missteps and distractions, the Fed has arguably performed better than most of the world’s other central banks: in the land of the blind, the one-eyed man is king. But the weaponization of the US dollar in 2022 has exposed greenback dependency as a vulnerability of existential proportions. With the banning of most Russian banks from the Swift (Society for Worldwide Interbank Financial Telecommunication) messaging system, and despite the dollar’s advantages for use in global trade, a line was crossed.
Despite petulant insistences to the contrary by the most well-known economist today (regrettably), a wave of de-dollarization is very much underway. It would be interesting to know how Krugman, who scoffed at the description of ejecting a nation from SWIFT as “weaponization,” would characterize French Finance Minister Bruno Le Maier’s dubbing the move a “financial nuclear weapon.”
None of this means that the dollar is “doomed,” and certainly not imminently. Neither is the US dollar “dead.” But its use as a sanctioning instrument likely represents the crossing of a rubicon whereby nations habitually using the dollar need to have currency alternatives ready. US Treasury Secretary Janet Yellen, even while citing the entrenched nature of the dollar in global trade, conceded that “diversif[cation]” in global foreign exchange reserves is underway earlier this month.
The argument that few if any other nations have currencies (and/or economies underlying them) that meet the requirements of a global reserve currency is a cogent one. Of course, one needn’t necessarily replace the dollar. What matters is having a ready means of transacting outside dollar-based systems and institutions in exigent circumstances: to maintain continuity of trade, and to hedge against the policy errors of central bankers. What is the most marketable, least manipulable means of shifting away from the dollar (and possibly back to it, once tensions have abated) with the lowest switching costs? Gold.
Gold in USD, Fall of USSR – present
Saudi Arabia, not a particular fan of the current Presidential administration, has indicated that it will invest billions of dollars into its expanding gold sector over the remainder of this decade. India recently launched an international gold bullion exchange. The imposition of (almost) unprecedented non-pharmaceutical interventions in early 2020 saw the price of gold rise to record highs. At the end of last year, central banks were buying gold at the fastest rate since 1967. As of May, 70 percent of central banks indicated believing that gold reserves would increase over the next year. Experimentation with using gold alongside dollars, and as money, including in some innovative, familiar formats here in the US, has been growing in just the last few years.
Specific details on the proposed currency union have not yet been released. They may not yet exist outside the minds of their promoters. Suffice to say that drawing scores of nations together from different continents and cultures, with different histories and remarkably diverse resource endowments will be a heavy lift, organizationally speaking. Smaller members are likely to find their interests marginalized, with the resulting dynamic closer to what’s seen in the United Nations than, say, OPEC. And few of the proposed members have confidence-inspiring track records where property rights are concerned.
The form and function of the BRICS+ financial institution, if any is indeed forthcoming, is of secondary importance. What matters is that the slow creep of de-dollarization is, on its flip side, an inexorable push toward the re-monetization of gold. And whether that means sound money through innovation or pressuring global central banks to reform their practices, those outcomes are welcome to say the least.
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About the Author
Peter C. Earle is an economist who joined AIER in 2018. Prior to that he spent over 20 years as a trader and analyst at a number of securities firms and hedge funds in the New York metropolitan area. His research focuses on financial markets, monetary policy, and problems in economic measurement. He has been quoted by the Wall Street Journal, Bloomberg, Reuters, CNBC, Grant’s Interest Rate Observer, NPR, and in numerous other media outlets and publications. Pete holds an MA in Applied Economics from American University, an MBA (Finance), and a BS in Engineering from the United States Military Academy at West Point.
Article cross-posted from AIER.
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