FameEX Hot Topics | Economist Jim Rickards Warns of BRICS Currency Leveraging Gold as a Menace to the Dollar

Renowned economist and best-selling author, Jim Rickards, has envisioned a hypothetical scenario where a BRICS bloc currency could impact the U.S. dollar. Rickards proposes the concept of the "bric," a currency anchored to a specific weight of gold by BRICS nations, without direct backing. The strategy involves allowing the bric's value to rise in response to U.S. dollar inflation and devaluation, which, over time, could lead to a gradual weakening and potential "destruction" of the dollar.

Rickards emphasizes that pegging the BRICS currency to gold is crucial for this strategy to work effectively. As dollar inflation increases, the bric's value would appreciate, making it more attractive to hold. However, he acknowledges that the full realization of this impact could be a lengthy process. Another tactic suggested by Rickards to accelerate the devaluation of the U.S. dollar involves manipulating commodity supply chains globally. By causing disruptions and driving up prices, BRICS nations, particularly Russia, could weaken the dollar's position further.

Discussions about an official BRICS currency have been a topic of interest. While Russian Foreign Minister Sergey Lavrov mentioned exploring the matter in August, South Africa's diplomat for BRICS relations, Anil Sooklal, countered this, stating that the currency issue is not on the upcoming summit's agenda. If the BRICS bloc adopts a gold-anchored currency, it could pose a considerable challenge to the U.S. dollar's current dominance as the world's reserve currency. Leveraging gold and strategically manipulating commodity supply chains, the BRICS nations aim to strengthen their own currencies while undermining the dollar's status. However, the success of such a currency strategy hinges on several factors, including global economic conditions, geopolitical dynamics, and effective coordination among BRICS nations in monetary policies.

The potential introduction of a BRICS currency has raised concerns about the future role of the U.S. dollar in the international financial system. As the BRICS nations continue to rise in economic significance, their efforts to diversify away from the dollar could gain traction on the global stage. The outcome of these developments will be closely monitored by financial markets and policymakers worldwide, as they could have far-reaching implications for the global financial landscape.

The future of the U.S. dollar and the potential emergence of a BRICS currency are subjects of intense interest and debate among economists, investors, and policymakers. As events unfold, the international community will be closely observing the actions of the BRICS bloc and assessing any potential impacts on the global monetary system.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.