The BRICS collective, comprising Brazil, Russia, India, China and South Africa, is working on a common currency in an attempt to ditch the US dollar and push back against America’s dominance. The move comes as Moscow and Beijing call for de-dollarisation in the face of Western sanctions.
The US dollar has been the official currency for international trade for years now. However, in recent times there has been talk of creating a new currency in an attempt to dump the dollar and push back against American hegemony.
The US dollar has been called the king of currency. It became the official reserve currency of the world in 1944. The decision was made by a delegation from 44 Allied countries called the Bretton Woods Agreement.
Since then, the dollar has enjoyed a powerful status in the world. It has given the US a disproportionate amount of influence over other economies. In fact, the US has for long used imposition of sanctions as a tool to achieve foreign policy goals.
If the BRICS nations do go ahead with their plan and come up with a new currency, it could help stabilise their economies. For an investor in BRICS countries, it would mean increased consumer confidence. This would lead to an uptick in spending and economic growth.
But will India accept this new currency? Will it want to be economically aligned with China with whom it is having a standoff at the border? Moreover, some experts say that this new deal might benefit Beijing more than New Delhi.
What happens next is unknown. But the fact that the dollar is losing power is certain. We shall keep an eye on this topic and get you more on this in the future.
CBDCs and The Great Reset
As dollars return to the United States, this “would immediately create a spike in interest rates to compensate for the loss of purchasing power,” said Schectman. This, he claimed, would in turn cause a “crash” in assets like housing, stocks, and bonds, which have gained in value due to loose Federal Reserve monetary policy.
“We’re coming from a period of time where asset prices were blown sky-high, over the last several years, with more money being created in the last three years than in the history of the country preceding it,” said Schectman.
As asset prices crash, the government would introduce Central Bank Digital Currencies (CBDCs), digital tokens issued and controlled by the Federal Reserve, and which act as fiat money. These would be offered, initially, as a way to help those who had lost their wealth.
“That’s when they would come in and roll out their new CBDC,” he forecast. “This gives them cover to roll it in.”