The Brics union has today announced a major expansion in a move that experts says threatens both American exceptionalism and the dominance of the dollar.
BRICS, the moniker given to to cooperation organization initially involving Brazil, Russia, India, China and South Africa, today announced six new member states at the Group’s Summit being held in Johannesburg, South Africa.
The new BRICS members are:
- Saudia Arabia
- Iran
- Argentina
- Egypt
- Ethiopia
- Unite Arab Emirates
The six new member nations will officially become BRICS members by the end of January 2024.
China’s president Xi Jinping labelled the move an “historic expansion” on Thursday.
Iranian Government spokesperson Mohammad Jamshidi heralded the announcement a “strategic victory for Iran’s foreign policy.”
“Conflict and disaster” ahead as US and allies are overtaken by BRICS
Following the announcement, prominent US economist Jeffery Sachs said western economies now need to come to terms with a world order in which the BRICS is larger than the G7.
The G7 refers to the political cooperation group consisting of the United States, Canada, France, Germany, Italy, Japan, the United Kingdom.
“We’re in a world where the BRICS countries are larger than the G7 countries,” he said.
“One of the points out of all of this is the United States doesn’t accept this transition, the United States still believes this is an ultimately U.S.-led world with two recalcitrant actors – Russia and China – and all the rest will come along to understand the realities.
“The U.S., in my opinion, is a quarter of a century out of date.”
Sachs says he believes the increasing global multipolarity will likely to lead to instability.
“What kind of world we’re heading to really is an open question, because we could be heading towards a world of massive conflict and disaster.”
Similar projections were also recently made by veteran hedge fund manager and publisher of the Capitalist Exploits Newsletter, Chris Macintosh.
Following the extraordinary news that former rivals, Saudi Arabia and Iran had agreed to restore ties after negotiations facilitated by China, Macintosh told his newsletter subscribers he believes the most likely outcome would be war.
“Unfortunately, what this means is that the probability of a major war being used by the United States to attempt to dismantle this fast forming bloc is now much, much more probable. There are those out there who would rather burn the world to the ground than let it fall into hands they don’t have leverage over.”
We recommended subscribing to Chris Macintosh’s Capitalist Exploits newsletter. Check it out here.
New BRICS members, new BRICS currency?
The threat to the U.S. dollar’s status as the world’s reserve Currency has been another major point of contention highlighted by experts in the wake of the BRICS expansion.
Ongoing speculation about a move to create a new BRICS currency was further heightened on Wednesday when Brazil’s President Luiz Inacio Lula da Silva openly urged BRICS member nations to create their own currency for trade and investment between each other and revealed a “working group to study a reference currency for BRICS” has been established.
“A united Russia, Saudi Arabia, UAE and Iran – that’s the world’s oil and gas powerhouse… Add in China, the world’s number one importer of oil and natural gas, and India is number three for oil, the BRICS expansion is strategic in so many ways,” said S.L. Kanthan, a geopolitical analyst who writes one of the world’s most popular geopolitics substack newsletters.
“This paves the road for de-dollarization and the USA is helplessly watching all this unfold. Gone are the days of quick coups, assassinations and wars to control nations.”
Meanwhile at an exclusive Australian investment forum on Wednesday, geopolitical expert Dr Vikram Mansharamani also speculated the BRICS meeting in Johannesburg could be a defining moment for a BRICS currency backed by gold.
“If the U.S. dollar suddenly is no longer the global reserve currency, what does that mean? Let me suggest to you it actually starts with President Nixon (when he severed links between the dollar and gold).” he said.
“Amongst emerging markets they think, ‘why does the United States have this exorbitant privilege’, America basically prints money when they want and the world gobbles it up.
“But here’s where the story gets very interesting, last year the Russia – Ukraine conflict led to the weaponization of the dollar in a way that had never been done before… And what that has done is very bluntly incentivized countries around the world to come up with an alternative.
“Brazil and China are now willing to trade on non-dollar terms for commodities,” he pointed out, adding India is also trading oil with Russia in Yuan, Rupees and Ruble, while in March this year a middle eastern LNG shipment arrived in China and was paid for in yuan.
“This story is cracking in front of our eyes and in fact today (at the BRICS Summit Johannesburg) there may even be discussions about a BRICS currency. They have been talking about this, they have been suggesting it is important.”
Gold-backed currency evidence in plain sight
Dr Mansharamani also highlighted how patterns of physical gold deliveries suggests that behind the scenes, the BRICS nations are making moves to turn talk of a common currency, into reality.
“This is where I think it gets really interesting. If you were to start connecting the dots, across markets, you might see some things that seem to be telegraphing this.
“Physical gold deliveries from all those futures contracts that financial investors trade in, almost all the deliveries are going to Turkey, Russia and China. Almost all of global gold production is going in that direction. Why?
“These leaders in China, Russia, India and Brazil understand that the world doesn’t trust them… Given that dynamic is it conceivable that the BRICS countries start a gold-backed currency. Could they offer that and let it be tested for the next 5-10 years?
“Maybe after 5-10 years people start trusting it, and if they start trusting it, what does it do to the dollar?”
“These are some of the things we have to start thinking about. If the dollar where to ever lose its status and get devalued in any material way this is a major problem for the world.
“A loss of the the dollar would create massive hyperinflation pressures in the world.”
The three-day BRICS Summit concludes in Johannesburg on Thursday.
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