Let’s discuss China and BRICS plan to create a new currency, how this would affect the US Dollar, and why central banks are buying Gold – Enjoy! | More information on my newsletter: http://grahamstephan.com/newsletter
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CHINA AND DE-DOLLARISATION:
All of this begins with what’s known as “The Group Of Seven,” or – G7 for short, which refers to a group of developed nations that all share strong economies and similar values – this includes The United States, Canada, France, Germany, Italy, Japan, and The United Kingdom.
The purpose of this group was to form a strong alliance among the world’s leading nations, who meet every single year to discuss and resolve economic problems. However – in 1999, it was said that the G7 didn’t sufficiently represent the global economy (specifically for emerging markets) so a “G20” group was born to provide an even larger forum for the global good – but, that was only the beginning.
In 2001, the term ‘BRICS’ was coined to represent the 5 emerging markets that were believed to dominate the global economy by 2050. Today, those BRICS nations have OVERTAKEN the G7 in terms of purchasing power GDP.
Recently, they’ve announced a plan “to create a new medium for payments – established on a strategy that “does not defend the dollar or euro.” It’s said that “the new currency would be secured by gold and other commodities such as rare-earth elements” – and, the new form of currency would be presented at the BRICS summit this year, which takes place between August 22-24th.
All of this is simply referred to as “de-dollarisation,” which – in basic terms – suggests replacing the US dollar as the world’s reserve currency – or, at least reducing its dominance by introducing more competition.
PROPONENTS of this, argue that “this process would reduce other countries’ dependence on the US dollar and the US economy, which could help mitigate the impact of economic and political changes in the US on their own economies.”
But, others believe that – it’s simply a way for countries to avoid sanctions, and that – “full dollarization can HELP countries achieve lower inflation, economic stability, and growth.”
MY OWN THOUGHTS:
I think some countries are weary of the US dollar because of inflation, money printing, and volatility throughout the Federal Reserve in terms of interest rates. There’s also the very, very, very small almost non-existent threat of a default on the national debt if Congress can’t agree on a new debt ceiling (but, that’s never happened before in history and I’d be shocked if that happens now)
So far, there’s never been a reserve currency that’s lasted for more than 110 years (and, we’re currently on year 103) but that doesn’t mean that we’re automatically next, barring an extreme financial meltdown.
That’s why, I believe the US dollar threat is something to be mindful of…but realistically, nothing else is trusted as much as the US dollar, nothing is probably going to happen anytime soon, and the best thing you can do, in the mean time…is to hit the like button and subscribe.
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