Will BRICS kill the US dollar?
Here are two different takes.
Photo: Palácio do Planalto
Hello Financial Healers,
There’s been a lot of news about BRICS lately. It might have something to do with their plans for a gold-backed currency. 🤔
Some experts claim this development will end the US dollar. Others take a more relaxed approach.
Either way, it’s wise to stay up on current events.
In this post, I’ll present two contrasting arguments about the looming BRICS currency. But first…
What is BRICS?
BRICS is a collection of fast-growing world economies: Brazil, Russia, India, China, and South Africa:
“With a combined population of 3.23 billion people, the BRICS countries make up 41% of the world’s population. They also claim 24% of global GDP… This coalition also holds 16% of the value of global trade.”
For my entire life, the US has been the world’s dominant force. But BRICS threatens to challenge that by offering a viable alternative for world currency.
Wealth of Geeks reports, “Shanghai… [is] the central headquarters of the new NDP or the New Development Bank. This $100 billion investment by the BRICS countries is the first step in challenging the… World Bank and the IMF…”
Here’s what makes people nervous:
“With this alternative international payments option available to these countries… who join the BRICS nations, the west… could see the dollar slide in popularity as the world’s reserve currency.”
What does this mean for you and me?
Here are two different takes. The first is from Robert Kiyosaki, admittedly very bleak:
Side note: this is not investment advice. Always seek guidance from a licensed professional.
Kiyosaki claims that the adoption of a gold-backed BRICS currency will kill fiat (or greenback) money. If this happens, inflation will not only cripple your bank account, it will destroy it.
Here’s another opinion…
Janet Yellen, the US Treasury Secretary, emphasiz[es] “no current developments, including those proposed by the BRICS, could… threaten the dollar’s stronghold… almost 90% of international transactions are facilitated using the dollar.”
Yellen claims the US dollar has such a hold on global trade, the possibility of reducing it does more harm than good.
BRICS seems to understand this. Leslie Maasdopr, vice president and CFO of BRICS Bank, maintains, “any notion of creating a common currency is a medium to long-term aspiration, rather than an immediate plan.”
There… right from BRICS itself. The idea of shifting the global currency in the short term is not viable. But in the long run, it’s inevitable.
Overall, I think both Kiyosaki’s and Yellen’s arguments have value.
Evaluate each opinion and make a decision for yourself and your family. In the end, we can’t predict the future, but we can take steps to protect our loved ones.
So there you have it…
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Thanks for reading. If you’re a premium subscriber, I’ll see you on Wednesday. Otherwise…
God bless your Prosperous Soul,
Stephen K. De Silva
About: Stephen K. De Silva is an author, speaker, and financial coach. From 1995 until 2017, he served as the CFO of Bethel Church, and a member of the senior leadership team. Stephen’s unique experience, training, and gifting make him a pioneer in the subject of money. You can reach Stephen at hello@stephenkdesilva.com