The BRICS+ Summit is set for October 22, 2024, hosted by Vladimir Putin in Kazan, Russia. Suspected to be on the agenda: New initiatives aimed at accelerating de-dollarization. Most notably, the development of a new gold-backed currency. The stakes could not be higher.
Why Is BRICS+ Important?
Originally, BRICS was conceived as an economic consortium of five major emerging economies in 2006. Brazil, Russia, India, China and South Africa. The coalition has steadily expanded its influence. Now, with additional members such as Egypt, Ethiopia, Iran, and Saudi Arabia, the BRICS+ alliance has emerged as a formidable bloc. And a force that challenges the long-standing dominance of the U.S. dollar.
The coalition wields considerable economic and geopolitical power. This includes:
- A combined population of over three billion people
- Approximately 40% of oil production
- Approximately 25% of global goods exports
- Combined, members’ economies are worth 28% of the global economy. 1
BRICS+ holds substantial sway over global economic dynamics. Their primary objective is to challenge the political and economic dominance of North America and Western Europe.2
A New Economic World Order?
The presidency of BRICS+ rotates each year. This year, Russia takes the helm. What’s on Vladimir Putin’s mind? Money. He has said he wants to achieve the following goals during Russia’s presidency of the group:
- Increase the role of BRICS in the international financial system
- Expand the use of BRICS currencies
- Promote collaboration between tax and customs authorities 2
This represents a strategic effort to forge an alternative economic order. They want greater autonomy and stability in a world dominated by Western financial institutions and a weaponized U.S. dollar. What might that mean for the West? De-dollarization, and other woes. 2
De-Dollarization and the Rise of Gold
Gold prices have been soaring to unprecedented heights. This is propelled largely by the purchasing frenzy from BRICS+ central banks. The World Gold Council reports that these nations have been the largest buyers of gold since 2022. This signals a collective move away from dollar reliance. Up until a few months ago, China had consistently expanded its gold reserves every month since October 2022. And Russia has increased the gold component of its reserves from 11% to 29% in just six years.3
The BRICS+ nations are not just hoarding gold. They are actively exploring a new currency that would be backed by it. Vladimir Putin has talked of issuing “a new global reserve currency." And a BRICS+ blockchain-based payment system is in development.4
These initiatives could potentially mark the “beginning of the end” for the U.S. dollar as the dominant reserve currency. If they are successful, it could lead to a significant reduction in dollar reliance for international trade and reserves. Thereby weakening the dollar's standing in the global economy.
The Implications for the U.S. Economy
The implications of a diminished dollar are dire. As the BRICS+ nations work towards a common currency, the U.S. dollar's dominance in international trade could erode. The dollar currently accounts for approximately 88% of currency exchanges. And 58% of global foreign currency reserves. But this could change dramatically if BRICS+ initiatives gain traction.5
A decline in dollar demand would mean two things. Devalued currency. And hyperinflation in the United States. As noted by financial analysts, the dollar has already lost 97% of its purchasing power since 1913. The prospect of further devaluation is compounded by rising national debt currently over $35 trillion. This raises significant concerns about the dollar's long-term stability.6
The Emerging Alternative
Some critics may dismiss the idea of a common BRICS+ currency as impractical. But the reality is that trading in national currencies is already taking shape. For example, India is purchasing oil from the United Arab Emirates using the rupee. This highlights the growing trend to bypass the petrodollar system. Such moves challenge the dollar’s supremacy. And signal a broader desire to assert greater independence from Western financial systems.
Conclusion
The global economic landscape is shifting. The BRICS+ coalition stands poised to redefine the contours of international trade and finance. Their initiatives signal a desire for a multipolar world. In this world, the interests of emerging economies take precedence over those of established powers. The decline of the dollar is becoming increasingly evident. And prudent investors are wise to consider alternative assets.
Gold is a tangible and historically valued commodity. Those looking to safeguard their savings against an impending economic transformation may consider investing in a Gold IRA through American Hartford Gold. Allocating a portion of your portfolio to physical precious metals could protect your wealth. Plus, you could benefit from the anticipated growth in gold prices as BRICS+ continues to challenge the dollar's dominance. To learn more about how to secure your financial future with a Gold IRA, contact American Hartford Gold at 800-462-0071.
_______________
Max Baecker is the President of American Hartford Gold (AHG), the nation’s largest retailer of precious metals. He leads American Hartford Gold’s mission to help clients achieve long-term financial security with physical gold and silver. Under his guidance, American Hartford Gold has delivered billions of dollars’ worth of precious metals to thousands of satisfied clients.
Max's dedication to upholding American Hartford Gold's industry-leading standards is reflected in its accolades. American Hartford Gold has made five high ranking appearances on the prestigious Inc. 5000 List of America’s Fastest-Growing Private Companies. AHG holds an A+ Rating from the BBB and a 5-Star Rating on Trustpilot with thousands of 5-star American Hartford Gold reviews. American Hartford Gold is the only precious metals company trusted and recommended by Bill O’Reilly.
AHG offers investment-grade gold and silver coins and bars at competitive prices. Clients also benefit from its buy-back commitment with no back-end fees. To learn more, visit American Hartford Gold.
1. https://www.reuters.com/world/saudis-mbs-will-not-attend-russias-brics-summit-2024-10-10/
2. https://www.bbc.com/news/world-66525474
3.https://www.gold.org/goldhub/data/gold-reserves-by-country
4.https://www.nasdaq.com/articles/how-would-new-brics-currency-affect-us-dollar-updated-2024
5.https://www.atlanticcouncil.org/programs/geoeconomics-center/dollar-dominance-monitor
6.https://disciplinefunds.com/2024/07/23/the-death-of-the-dollar-in-perspective/
© 2024 Newsmax Finance. All rights reserved.