A New Global Economic Order? BRICS Alliance Grows, Aims to Dethrone the Dollar

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An international alliance of multiple countries has been pushing to undermine the power of the U.S. Dollar, and now, they’ve added more key members.

The BRICS nations comprise almost half of the world’s population, possess close to half the world’s oil, and want to dethrone the Dollar as the world’s reserve currency. 

This collection of emerging economies whose name, BRICS, is an acronym for members Brazil, Russia, India, China and South Africa, doubled in size on January 1, adding Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. 

More than 30 other nations have expressed interest in joining this group that wants to ditch the dollar and establish a new global economic order. 

Currency expert James Rickards blames the U.S. government for creating this economic rival.   

“You ask, ‘Why is this going on at all?’ And the answer is we’ve turned the dollar into a weapon,” Rickards told us. “And if you’re on the receiving end of that, Russia found out the hard way. But if you’re China, Brazil, India, a lot of other countries, what you’re asking yourself right now is, ‘Hey, what happens if the United States wakes up one day and decides they don’t like what I’m doing?'”

Could It Really Happen?

But whether BRICS could actually create a currency to surpass the dollar is up for debate. While the threat of the currency overtaking the dollar makes some people nervous, many experts see too many obstacles for that to happen any time soon.

Rickards says, “About 60 percent of global reserves are in securities denominated in dollars. Now, that’s not easy to unseat. Even if you don’t like the dollar, you have to ask yourself, ‘Where is there a securities market big enough to absorb the (need for a place to deposit) savings?’ And there isn’t one.”

Financial Analyst Peter Earl of the American Institute for Economic Research says, “For a BRICS currency to really take off, they would have to come up with something better than the dollar, quite simply. But it’s not simple to do. Of the many ideas that have been thrown around, only gold or maybe some sort of stable coin, which is a specialized inflation-resistant cryptocurrency, would have a chance.”

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This alliance also looks very unstable politically. BRICS can only make decisions unanimously, and yet two of its members, India and China, have viewed one another as enemies.  

New members Egypt and Ethiopia are fighting over water from the Nile, and Saudi Arabia and Iran are arch-enemies in the Middle East.

Saudi Arabia’s decision to join could also kill any chance of a peace and defense deal it had hoped to negotiate with Israel and the United States.

Dollar-Damage Would Spike US Inflation, Hurt Americans

What BRICS could accomplish is to further weaken the dollar by no longer using it as a payment currency between member nations, which would make dollars worth less. 

Richards says, “It does reduce the role of the dollar. It could be inflationary in the U.S. if dollars are less in demand, they may be worth less. And that means we have to pay more for our stuff. And so that’s inflationary.”

Weakening the dollar would create some significant hurt for American consumers, but replacing the dollar as the world reserve currency is not likely anytime soon. 


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