Renowned economist and best-selling author Jim Rickards has outlined the potential consequences of introducing a BRICS currency to rival the dollar, saying that it will leverage gold. According to Rickards, this new currency, referred to as “BRIC” by him, will be linked to a specific weight of gold, serving as an anchor but not redeemable or backed by it. The primary objective of the “BRIC” will be to weaken the dollar by supporting commodity prices.- Brazil, Russia, India, China, and South Africa – are set to launch a new joint currency backed by gold, a move that could have far-reaching implications for the global financial landscape.
Jim Rickards suggests that the BRICS currency may be tied to a specific weight of gold
Economist and best-selling author Jim Rickards recently shared his perspective on a theoretical BRICS (Brazil, Russia, India, China, and South Africa) bloc currency and its potential impact on devaluing the U.S. dollar. Rickards envisions the BRICS currency, which he refers to as “BRIC,” to be tied to a specific weight of gold but not directly backed by it. He suggests that the BRICS nations would rely on the gold markets to determine the value of the currency without intervening to manage the bric-dollar peg.
Consequently, as inflation and devaluation affect the U.S. dollar, the price of the BRICS currency could rise, potentially contributing to the decline of the greenback. Regarding this scenario, Rickards commented:
“It’s a way to destroy the dollar. You don’t need dollars and you don’t need gold. You just need to be smart enough to anchor your currency to gold, and when dollar inflation starts to go up, your currency is going to be worth more because of how you pegged it, not to dollars, but how you pegged it to gold. “
Nevertheless, Rickards acknowledges that this process could take several years to unfold.
Causing disruptions in supply chains
According to Rickards, an alternative method where BRICS currency will leverage gold to accelerate the devaluation of the U.S. dollar would involve intervening in the global supply chains of commodities. As an example, he pointed to the termination of the Black Sea grain deal between Russia and Ukraine, highlighting that grain prices surged by 10% shortly after the announcement of its suspension. Regarding this situation, Rickards provided further insight, stating:
“ So, if I were a BRICS member, and I were Russia in particular, and I had this currency tied to gold, and I wanted my currency to be more valuable and your currency (U.S. dollar) less valuable, one of the ways to do that is mess with the supply chain and drive up the price of oil, gasoline, grain.”
Back in January, Russian Foreign Minister Sergey Lavrov mentioned that the BRICS bloc would be discussing the possibility of an official currency in August. However, Anil Sooklal, the South African diplomat responsible for BRICS relations, has recently clarified that the currency topic will not be on the agenda for the upcoming summit.
Economist Jim Rickards’ vision of a BRICS currency that will leverage gold and aimed at undermining the U.S. dollar has sparked intense debates about the future of the global financial landscape. While the feasibility of such a currency remains uncertain, the BRICS nations’ growing economic influence and their efforts to reduce dependence on the dollar underscore the ongoing shifts in the international monetary system. The potential impact on supply chains and commodity prices further adds to the complexity of this hypothetical scenario. As time progresses, it will be crucial to monitor how the BRICS countries navigate these challenges and shape the future of international finance.