Jim Rickards, renowned economist and best-selling author, has offered his insights into the potential impact on the dollar if a BRICS bloc currency were to be introduced. He suggests that the proposed BRICS currency, which he refers to as the “bric,” might be tied (though not redeemable or backed) to a certain measure of gold, and could potentially be used to undermine the dollar by increasing commodity prices.
Rickards Envisions BRICS Currency Tied to Gold
Rickards, in discussing a potential BRICS (Brazil, Russia, India, China, and South Africa) bloc currency, has proposed that it could be used to devalue the U.S. dollar. He envisions that the “bric,” as he refers to this hypothetical currency, would be tied to a specific weight of gold, though not backed by it, as the BRICS nations could take advantage of the gold markets without intervening in the bric-dollar exchange rate.
This setup could allow the bric’s value to increase as inflation and devaluation affect the U.S. dollar, theoretically leading to the downfall of the U.S. currency. Rickards elaborated on this, stating:
“This is a method to devalue the dollar. There’s no need for dollars or gold. It’s sufficient to be savvy enough to anchor your currency to gold, and when inflation begins to affect the dollar, your currency will gain value due to its pegging to gold, not to dollars.”
Rickards, however, recognizes that this process could potentially take years to unfold.
Potential for Supply Chain Disruptions
In addition to this, Rickards has suggested that another way to accelerate the depreciation of the U.S. dollar could involve tampering with global commodity supply chains. He cited the cessation of the Black Sea grain deal between Russia and Ukraine as an example, noting that grain prices increased by 10% immediately following the announcement of the deal’s suspension.
Rickards further explained his point, stating:
“As a member of the BRICS, and specifically Russia, with a currency tied to gold, and with the desire to increase the value of my own currency and decrease the value of yours (U.S. dollar), one strategy might involve interfering with the supply chain to raise the prices of oil, gasoline, grain.”
In January, Russian Foreign Minister Sergey Lavrov mentioned that the BRICS bloc would consider an official currency in August. However, South Africa’s diplomat responsible for BRICS relations, Anil Sooklal, recently stated that this topic was not included in the upcoming summit’s agenda.
Frequently Asked Questions (FAQs) about BRICS Currency
Who is Jim Rickards?
What is the “bric” as referred to by Jim Rickards?
The “bric” is a term coined by Jim Rickards to refer to a hypothetical BRICS bloc currency. BRICS represents Brazil, Russia, India, China, and South Africa.
How does Jim Rickards predict the “bric” could affect the U.S. dollar?
Rickards suggests that the “bric” could potentially be used to undermine the U.S. dollar. He proposes that it could be anchored to a specific weight of gold (but not backed by it), allowing it to increase in value as inflation and devaluation affect the U.S. dollar.
What impact does Rickards suggest supply chain disruptions could have on the U.S. dollar?
Rickards suggests that tampering with global commodity supply chains could accelerate the depreciation of the U.S. dollar. As an example, he cites the increase in grain prices following the cessation of the Black Sea grain deal between Russia and Ukraine.
Has the introduction of a BRICS bloc currency been officially confirmed?
As of this report, the introduction of a BRICS bloc currency has not been officially confirmed. While Russian Foreign Minister Sergey Lavrov stated that the BRICS bloc would discuss an official currency, South Africa’s diplomat in charge of BRICS relations, Anil Sooklal, clarified that this topic was not on the agenda for the upcoming summit.
More about BRICS Currency
- Jim Rickards’ Official Website
- BRICS Information Portal
- Gold Market Overview
- Global Currency Exchange Information
- Impact of Commodity Prices on Economy