Simon Ng Economist Jim Rickards Anticipates Unveiling of New BRICS Currency, Warning of Global Unpreparedness for the Implications
According to economist and “Currency Wars” author Jim Rickards, there are indications of a forthcoming new BRICS currency that could potentially diminish the role of the US dollar in global payments and eventually displace it as the primary payment and reserve currency. Rickards emphasizes that the process leading to this shift is unprecedented and that the world is ill-prepared for the geopolitical shockwave it may create. He views the BRICS nations (Brazil, Russia, India, China, and South Africa) as making a realistic effort to de-dollarize global payments and reserves.
Rickards recently shared his predictions about the proposed BRICS currency in an opinion piece published by the Daily Reckoning. He notes that the leaders of the BRICS countries are expected to discuss the concept of a common currency at their upcoming summit in August. Rickards specifically highlights August 22 as a crucial date, suggesting that a significant development in international finance will occur then.
Rickards describes the new currency as a potential game-changer that could weaken the influence of the US dollar. He further explains that eight nations have formally applied to join the economic bloc, while 17 others have expressed their interest. Algeria, Argentina, Bahrain, Egypt, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates are among the formal applicants, and the countries expressing interest include Afghanistan, Bangladesh, Belarus, Kazakhstan, Mexico, Nicaragua, Nigeria, Pakistan, Senegal, Sudan, Syria, Thailand, Tunisia, Turkey, Uruguay, Venezuela, and Zimbabwe.
Rickards underscores the significance of BRICS as a credible alternative to Western dominance, considering various factors such as population, landmass, energy output, GDP, food output, and nuclear weapons. He highlights the collective strength of BRICS as a pole of a new multipolar or even bipolar world.
The economist also discusses the global trend of de-dollarization, where an increasing number of countries are shifting away from using the US dollar in trade settlements in favor of their own national currencies. Rickards attributes this trend to the US weaponization of the dollar through the use of sanctions, which has raised concerns among other nations about potential repercussions. He suggests that the BRICS+ initiative is a realistic endeavor to de-dollarize global payments and reserves.
Rickards predicts that the new BRICS currency will likely be linked to a basket of commodities for trade among its members, with initial commodities potentially including oil, wheat, copper, and other essential goods. He expects the currency to be digital rather than paper notes, maintained on a permissioned ledger by a new BRICS+ financial institution. He clarifies that this currency will not be a cryptocurrency since it will not be decentralized, maintained on a blockchain, or open to all parties without approval.
According to Rickards, it is likely that the new BRICS+ currency will be tied to a weight of gold, capitalizing on the gold production capabilities of Russia and China, which are the largest producers globally and rank sixth and seventh, respectively, among the nations with gold reserves.
While Rickards anticipates the unveiling of the new BRICS currency at the upcoming leaders’ summit, there is widespread skepticism regarding its feasibility. Even individuals like Lord Jim O’Neill, the British economist credited with coining the BRIC acronym, harbor doubts. The outcome of this proposal remains uncertain, and opinions vary regarding the potential implications of a new BRICS currency.
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Frequently Asked Questions (FAQs) about new BRICS currency
What is the predicted new BRICS currency?
The predicted new BRICS currency refers to a proposed common currency among the BRICS nations (Brazil, Russia, India, China, and South Africa) that economist Jim Rickards believes could weaken the role of the US dollar in global payments and potentially replace it as the leading payment and reserve currency.
What is the basis for Jim Rickards’ predictions?
Jim Rickards bases his predictions on the growing trend of de-dollarization, where countries are shifting away from using the US dollar in trade settlements. He highlights the concerns raised by the US weaponization of the dollar through the use of sanctions, leading nations to explore alternatives. Rickards sees the BRICS nations’ efforts to de-dollarize global payments and reserves as a significant factor supporting his predictions.
How will the new BRICS currency be implemented?
According to Jim Rickards, the new BRICS currency will likely be a digital currency, not in the form of paper notes. It could be maintained on a permissioned ledger by a new BRICS+ financial institution. The currency is expected to be pegged to a basket of commodities initially, such as oil, wheat, copper, and other globally traded essential goods.
What are the potential implications of a new BRICS currency?
The potential implications of a new BRICS currency are still uncertain and subject to debate. Jim Rickards suggests it could challenge the dominance of the US dollar, weaken its role in global payments, and potentially displace it as the leading payment and reserve currency. However, there is skepticism about the feasibility and impact of such a currency, with differing opinions among economists and experts. Time will tell how the situation unfolds.
More about new BRICS currency
- Currency Wars by Jim Rickards: Jim Rickards’ book that delves into the topic of currency wars and their impact on the global financial system.
- BRICS: Official website providing information about the BRICS nations and their cooperation in various areas.
- De-Dollarization: A Growing Trend: An article discussing the trend of de-dollarization and its implications on global finance.
- The Role of the US Dollar as a Global Reserve Currency: Investopedia article explaining the role of the US dollar as a global reserve currency and its significance.
- Geopolitical Impact of Currency Shifts: World Finance article exploring the geopolitical impact of currency shifts and the potential challenges they pose to existing global power dynamics.
