by Michael Snyder, The Economic Collapse Blog:
Is the global dominance of the U.S. dollar in danger? In recent weeks, there has been lots of speculation about the introduction of a new BRICS currency that would be backed by gold. In this article, my goal is to sort through what is true and what is not true. From August 22nd to August 24th, the 15th BRICS summit will be held in Johannesburg, South Africa. Back on July 5th, RT sparked a firestorm of rumors when it reported that a decision to introduce a new BRICS currency that would be backed by gold would be made prior to the upcoming summit in Johannesburg…
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BRICS is set to introduce a new currency backed by gold, in contrast to the credit-backed US dollar, with the decision coming a month ahead of the bloc’s summit in Johannesburg. With the growing initiative, more and more countries are lining-up to join the group.
In the aftermath of that report, many prominent voices were warning that the U.S. dollar was in big trouble.
For example, author Robert Kiyosaki boldly declared that the U.S. dollar “will die”…
The end of the U.S. dollar is near, said the best-selling author of ‘Rich Dad Poor Dad’ Robert Kiyosaki, citing an upcoming BRICS summit in South Africa as a trigger.
Kiyosaki is projecting that the BRICS group, comprised of Brazil, Russia, India, China, and South Africa, will announce their new gold-backed digital currency during its summit on August 22-24, and it will have dire consequences for the U.S. dollar.
“August 22, 2023, in Johannesburg, South Africa, BRICS nations announce gold backed crypto. US $ will die,” Kiyosaki tweeted last week. “Trillions of US $ rush home. Inflation through the roof.”
Without a doubt, the dominance of the U.S. dollar is under threat from multiple directions.
But a new BRICS currency will not be introduced during this upcoming summit.
During an interview with Bloomberg, one of the top executives at The New Development Bank publicly admitted that the creation of a new BRICS currency is “a medium to long term ambition”, but he also confirmed that such a currency will not be introduced right now…
The New Development Bank, a financial institution created by the BRICS bloc of emerging markets, doesn’t have any immediate plans for the group to create a common currency, its vice president and chief financial officer said.
While the members of BRICS – Brazil, Russia, India, China and South Africa – are pushing to conduct more trade between each other in local currencies, they aren’t ready to challenge the global dominance of the dollar, Leslie Maasdorp said in an interview on Wednesday with Bloomberg TV’s Haslinda Amin.
“The development of anything alternative is more a medium to long term ambition,” he said. “There is no suggestion right now to creates a BRICS currency.”
But that doesn’t mean that really big things aren’t happening.
In addition to the core BRICS nations, Bangladesh, the United Arab Emirates and Uruguay are apparently getting very close to joining The New Development Bank.
Those are relatively minor players on the global scene, but if Saudi Arabia also joins, that could change everything.
There is lots of chatter that this could happen soon, and during a recent interview Lobo Tiggre said that such a move would be “a watershed event”…
Saudi Arabia joining BRICS would be “a watershed event,” he said. “I think if we wake up and Saudi Arabia joins the BRICS alliance, the world would be a different world in a meaningful and significant way.”
I agree.
If Saudi Arabia joins BRICS, it would represent an enormous shift.
And that would probably greatly accelerate the transition to trading Middle Eastern oil in currencies other than the U.S. dollar.
Even without a new currency, it appears to be inevitable that BRICS is going to continue to accumulate more power and more influence.
According to South Africa’s ambassador to BRICS, over 40 different nations “have indicated an interest in joining the bloc”…
Anil Sooklal, South Africa’s ambassador to BRICS, told reporters on Thursday that more than 40 countries have indicated an interest in joining the bloc of major developing economies, but there is no gold-backed currency announcement planned for next month’s summit.
And Sooklal also told reporters that a whopping 69 global leaders have been invited to attend the BRICS summit next month…
Sooklal said that “Argentina, all the major Global South countries,” have applied for membership, and that other economically significant countries have expressed an interest in joining, including Bangladesh, the United Arab Emirates, Iran and Saudi Arabia, and even some European countries. “They are quite weighty countries,” he said.
He added that South Africa has invited 69 global leaders to attend the BRICS summit, demonstrating the bloc’s interest in increasing its global influence.
When BRICS was formed in 2009, many western leaders didn’t take it very seriously.
But now it has become a powerhouse.
And during this upcoming summit, finding more ways for BRICS countries to settle trades “in their own national currencies” is something that will be on the agenda…
Sooklal says BRICS, which is made up of Brazil, Russia, India, China and South Africa, is looking to strengthen economic ties among member nations by settling trades in their own national currencies.
“What we have said and we continue to deepen is trading in local currencies and settlement in local currencies.”
Sooklal adds that the decision of the US and its allies to impose financial and economic sanctions against Russia for the war in Ukraine has catalyzed the move of the economic bloc to shift away from the dollar.
They really do intend to move away from using the U.S. dollar.
This is a process that will take time, but the dominance of the U.S. dollar in global trade is definitely starting to erode.
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