FameEX Hot Topics | Economist Jim Rickards Predicts BRICS Currency to Utilize Gold, Posing a Threat to the Dollar

Economist and best-selling author, Jim Rickards, has outlined a hypothetical scenario regarding a BRICS bloc currency's impact on the U.S. dollar. He envisions the "bric" (the name he assigns to the BRICS currency) to be anchored to a specific weight of gold but not backed by it. The BRICS nations would allow the currency's value to rise in response to inflation and devaluation of the U.S. dollar, potentially leading to the dollar's devaluation. Rickards sees this as a method to destroy the dollar gradually.

Rickards emphasizes that the key to this strategy is anchoring the BRICS currency to gold, which allows it to appreciate when the dollar's inflation rises. However, he acknowledges that such an impact could take years to materialize. Rickards also suggests another way to accelerate the devaluation of the U.S. dollar by BRICS nations. He points out that interfering with the supply chains of commodities in the world could drive up prices and weaken the dollar's value further. As an example, he mentions the recent suspension of the Black Sea grain deal between Russia and Ukraine, which immediately caused a 10% increase in grain prices.

Regarding discussions about an official BRICS currency, Russian Foreign Minister Sergey Lavrov mentioned the bloc would explore this topic in August. However, South Africa's diplomat responsible for BRICS relations, Anil Sooklal, contradicted this claim, stating that the currency issue is not on the agenda for the upcoming summit.

If the BRICS bloc adopts a currency anchored to gold, it could potentially pose a significant challenge to the U.S. dollar's dominant position in the international financial system. By leveraging gold and strategically manipulating commodity supply chains, the BRICS nations aim to strengthen their currencies while weakening the dollar. While the process might take time, it could have long-term implications for global financial dynamics. The prospect of a BRICS currency has raised concerns about the dollar's future as the world's reserve currency. As the BRICS nations continue to grow in economic prominence, their efforts to diversify away from the dollar may gain traction in the international arena. However, the success of such a currency strategy would depend on various factors, including global economic conditions, geopolitical dynamics, and the willingness of BRICS nations to coordinate their monetary policies effectively.

As events unfold, financial markets and policymakers worldwide will closely monitor the BRICS bloc's actions and any potential implications for the global financial landscape. The future of the dollar and the potential rise of a BRICS currency remain subjects of keen interest and debate among economists, investors, and policymakers alike.

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