BRICS Just Pulled The Trigger!
By Sean Foo
The BRICS bank moves to challenge the global dollar system by issuing bonds in their local currencies. This move could start to trigger a wave of countries moving to break away from dollar-denominated debts. This is bad for the US bond market but great for emerging markets looking to grow faster and reduce risk from the established order. Here’s what you must know!
Here’s what others had to say:
There is no doubt in my mind that the time has come to knee capped the USD system that had held back the development of developing countries in Latin America, Africa and Asia. Cheers to BRICS for leading the way with the New Development Bank and its local currency bond initiatives! Add more members like Saudi Arabia and the rest of the developing world to strengthen BRICS with BRICS +! 🙂
BRIKS will succeed. Personally I pray that they will. There is not much else that can take us out of this horrible situation the western style economies has imposed on the world.
Debts can be defaulted. The dollar will die faster than people expect.
Biden pulled the trigger, and BRICS shot back. Thanks for posting.
The BRICS financial system will succeed, but it will take years. You have time to prepare for the fallout which is inevitable.
I was shocked when I heard how many countries are in attendance at the BRICS summit. I figured it was around 45-46 but the actual number is over 60!
That is only one reason that this process will happen a lot faster than people think. What is not even being considered is that, as the cost of dollar debt continues to rise, I expect many emerging markets to default on US debt, driving down the value of the dollar.
It will not matter if Treasuries pay a higher rate of return if the dollar declines in value.
Then there’s the decline in foreign purchasing of Treasuries. That doesn’t mean they’re dumping Treasuries, it means they are cashing in Treasuries as they mature. Where they used to roll over the investments for new bonds, they’re taking the money out of the US system. This drives up the need for liquidity, while concurrently reducing new investment.
If countries begin demanding payment in local currencies for trade, rather than using dollars, that will be the next step. The alternative will be that they can refuse US trade. If they have real assets which the US desperately needs, there will be no choice. Consider oil, rare earth minerals and uranium. Exporting countries have other markets to sell to, so they can realistically refuse dollars and demand local currencies. It would also mean other currencies rise in value compared to the dollar, causing domestic inflation in the US.
There s no need to dethrone the dollar in the hurry, all they need is to derisk and continue to do more trades amongst themselves
It seem like the US admits that it has had an unfair advantage with their reserve currency. Why otherwise would they consider themselves under attack, when other countries just want to utilize their own currencies in trade?
I guess the USA realized that they need a lot of unfair advantages. Competing fairly obviously isn’t their Forte!
Money is like a road, perhaps. It should have integrity, no matter who uses it. What would it be like to travel from A to B down a road where the road’s integrity depended on the road builder’s current opinion of you?
I don’t see what US/”Collective West” can actually offer in terms of development that the BRICS can’t offer (and offer better). In fact, the Collective West had proven time and again that it fails to help developing countries (it wasn’t even honestly trying). On the other hand, BRICS is a perfectly self-sustainable force, in terms of resources and know-how, for assisting developing countries. So, it makes sense to ditch the USD in that context.
The dollar is been printed/issued by a private institution, the Federal Reserve. Unlike other countries, their currencies are issued by their Government Institution i.e. the Central Bank.
15th BRICS Members Summit 22nd to 24th August 2023 year is stepping Stones of expansion of members in the Multilateral institutions of resilient sustainability development .
Not sure if BRICS bank will succeed, but I am VERY 100% SURE the Dollar will fail.
The five BRICS countries together were said to contribute nearly 31.5 per cent of the global GDP, compared to 30.7 per cent by G7 countries. so Brics has more GDP than US
Seems like the gold-backed BRICS currency is a non-starter. But I think that is just one tool in the de-dollarization toolbox. Even settlements in local currencies is a form of de-dollarization. And now the BRICS Bank giving out non-dollar loans.
BRICS Bank will succeed. But it’s not the strength of their currency vis-a-vis USD to is the deal maker, it’s the fact that most of the commodities is in the East and Global South. To make success even more plausible, technology and military technology/capability is as well. May BRICS rise on the global stage and take her rightful place.
US bond yield will have to keep going up, to fish investors. They will continue to stagflate, as their borrowing cost increase. It’ll be interesting next year when they lower their rate to lift their economy for their presidential election.