BRICS – the golden NON-billion

40 countries have expressed interest in joining BRICS before the 2024 summit (to be held in Tatarstan in October 2024).

The number of countries expressing interest is growing rapidly. Developing countries from Asia, Africa, South America and Eastern Europe are eager to join the group. They want to strengthen their local currencies and national economies and not depend on the US dollar. Strengthening local currencies will lead to prosperity of domestic businesses and, as a result, to growth of GDP and consumption.

The dependence on the US dollar remains a concern as the debt crisis in America only worsens. Since developing countries hold US dollars in reserves, a recession could undermine their economies and lead to a recession. Therefore, ending dependence on the US dollar is a top priority for these countries seeking to join BRICS before the 2024 summit.

How many sectors of the US economy will suffer if BRICS abandon the dollar in trade

Global trade will be largely conducted in the new gold-backed BRICS currency or in the local currencies of other emerging economies. This will help them protect their own economies, as hoarding the US dollar in reserves is risky. Growing US debt reached $34.4 trillion this month (123% of GDP), and emerging economies want to distance themselves from the dollar.

The main sectors of the US that will suffer if BRICS abandons the dollar will be banking and financial services. Banks across America will be forced to take action to protect the dollar's prospects. Moreover, new currency pairs may take center stage in the forex market, adding to the pressure on the US dollar.

Over the past 50 years, the banking sector has grown 15 times. Banks must exist as an auxiliary link in the economy of the country and the world: bank transfers, lending to the economy of the country and individuals. The problems began when bankers began to create so-called surrogate securities.

The 2008 crisis showed how the unlimited appetites of bankers and their unlimited opportunities led the world to a crisis that has only changed since then. The world has not been able to get out of it to this day. Hence the fear of all those whose well-being is based on the dollar and its derivatives.

After oil, BRICS countries account for 72% of the world's rare earth metal reserves

With the expansion of BRICS in 2024, the alliance officially accounts for 42% of the world's oil and gas reserves. If that weren't enough, BRICS now accounts for the majority of rare earth metal reserves, at 72%. This gives the alliance an additional advantage in the global oil and rare earth metals trade.

BRICS countries complement each other in the extraction of essential minerals and manufacturing. Cooperation can facilitate mutual trade among BRICS members and ensure security of supply. But this is really bad news for those countries that exist only in the dollar world. It already smells of a monopoly on resources. And where there are monopolies, there is the ability to dictate prices, and most importantly – to impose sanctions. Does this remind you of anything?

What do these BRICS even think of themselves?

“One of the possible areas of cooperation in this area is the expansion of mutual trade in mineral raw materials and metals in order to ensure uninterrupted supplies and price stability,” said Evgeny Petrov, head of Rosnedra. He added: “A simple analysis shows that the entry of new members into BRICS will provide 72% of the world's rare earth metal resources.”

For reference: Iran, which was under sanctions for 40 years, suddenly (or maybe not suddenly) joins BRICS and offers, while there is no single currency, to use its developments (40 years have not been in vain). You can read here here. Plus there was also information about the creation of a BRICS currency. They say that they are working on creating it, but they do not say what stage they are at.

But what will underpin this currency? Gold? Minerals? The Big Mac Index? 1 kg of sugar or a gallon of oil?

BRICS: Analyst Says Gold-Backed Currency Could Threaten US Dollar

The BRICS economic alliance is working on creating its own currency, and one analyst has said the gold-backed asset could pose a threat to the U.S. dollar. The bloc's de-dollarization plans raise questions about the alliance's ability to have a currency that can replace the dollar USA. So it all depends on what the currency is backed by. Gold has seen a resurgence this year. JPMorgan recently predicted that the metal would average $2,500 in Q4 2024. With the BRICS countries hoarding gold this year, it could be a viable alternative if designed well.

BRICS gold-backed currency a clear rival to the US dollar

The BRICS group has spent much of the past year grappling with Western influence on the economy, with much of the focus on the dollar. In particular, the group continues to look for ways to reduce international dependence on the currency. Although the project is still in development, one expert has outlined how it could become an impressive contender.

University of the Cumberlands finance professor Richard Grant recently noted that a gold-backed BRICS currency could threaten the US dollar. In his recent article, he outlined the bloc's native currency project. Moreover, he noted why gold might be its best chance.

“Every currency serves as a domestic unit of account, a medium of exchange, a policy tool and a potential source of government revenue,” Grant said. “A well-managed currency can also be a marker of national independence and value.” This is what seems to be driving the BRICS. Oddly enough, this statement comes from a Western finance professor.

But the situation changes when it comes to gold. “Gold is the ultimate reserve currency,” Grant noted. Moreover, he said, “if displacing the dollar is the primary goal, then gold should play a larger role in creating the BRICS unit of account. This may give them the greatest chance of de-dollarizing global finance.”

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