Celebrated economist Jim Rickards, famed for his best-selling book “Currency Wars,” forecasts a potential upheaval in the global economic order.
According to Rickards, this shake-up centers around the BRICS nations – Brazil, Russia, India, China, and South Africa – as they could be on the precipice of introducing a novel currency that could potentially destabilize the U.S. dollar’s long-held supremacy.
BRICS’ bold bid to upset the dollar dominance
Rickards anticipates an upcoming announcement at the BRICS leaders’ summit in August, which could unveil an audacious plan – the launch of a unique currency.
This new monetary initiative has the potential to degrade the U.S. dollar’s dominance in global payments and reserves, possibly succeeding in just a few years.
This remarkable development, however, isn’t a spur-of-the-moment decision but a strategic move fostered over time by several nations seeking inclusion in the economic bloc.
According to Rickards, eight countries – Algeria, Argentina, Bahrain, Egypt, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates – have officially requested to join, while 17 others are exhibiting keen interest.
South Africa’s ambassador to the group, Anil Sooklal, further adds to this narrative, highlighting an ongoing influx of applications to join the bloc.
The currency is a potential game changer for global economy
In Rickards’ analysis, the coalition of BRICS and interested nations, termed BRICS+, is more than a typical multilateral forum. It represents a viable alternative to Western hegemony, functioning as a pivot in the emerging multipolar global economic order.
The crux of this monetary pivot revolves around the escalating trend of global de-dollarization, underpinned by increasing reluctance towards U.S. dollar usage in trade settlements.
Rickards attributes this shift to the U.S.’s propensity for dollar weaponization through sanctions, fostering anxiety among nations about potential financial reprisals. This fear has catalyzed efforts to withdraw from the dollar system, with BRICS+ emerging as the torchbearer for this initiative.
According to Rickards, the BRICS+ currency will not just be a conventional digital currency on a permissioned ledger but will be pegged to a basket of globally traded commodities, such as oil and wheat, and maintained by a new BRICS+ financial institution.
However, it will differ from typical cryptocurrencies as it is not decentralized or universally accessible.
In Rickards’ view, the BRICS+ currency is set to undergo another transformation in the future. He predicts that it will eventually be linked to a gold standard, capitalizing on Russia and China’s strengths as the world’s largest gold producers.
This monetary revolution underscores a strategic move towards stability, leveraging the reliability of gold as a store of value.
As we await the potential unveiling of the BRICS currency at the upcoming summit, there is a chorus of skepticism echoing in global economic circles.
Many critics question the feasibility of such a currency, citing potential impediments in policy coordination and economic disparities among BRICS nations. This skepticism is even shared by individuals like Lord Jim O’Neill, the British economist who originally coined the BRICS acronym.
Nonetheless, Rickards’ forecast and the upcoming BRICS summit warrant close attention as we stand at the cusp of what could be a landmark shift in global economics.
If Rickards’ predictions come to fruition, the introduction of a BRICS currency could indeed herald a new era in the world economic order.
