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April 7, 2023 - Epoch Times

12:26

BRICS Creating New Currency Backed by Gold, Soil, Rare-Earth Elements

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	While all the media here in America has been laser-focused on the arrest and indictment of President Trump, well, it's worth mentioning that the rest of the world has not stopped spinning.
	And instead, many of our geopolitical rivals, they're taking this opportunity, this moment when America is, you can say, distracted, to make their moves.
	For instance, it turns out that the BRICS nations are working overtime to create a brand new currency of their own that will be pegged to physical assets, such as gold.
	Now, in case you've never heard of it before, BRICS is an organization similar to that of the G7. However, while the G7 is a group of more advanced and mature economies, BRICS is the organization for the leading emerging economies.
	At the moment, there are five member states.
	Brazil, Russia, India, China, and South Africa.
	Together, these five nations, they represent about 26% of the world's land surface area.
	They represent about 41% of the global population.
	And at this moment, they represent approximately 31.5% of the global GDP. And by the way, just as a fun fact, the BRICS nations, they recently overtook the G7 in terms of their collective GDP. At the moment, while BRICS represents 31.5% of the global GDP, As you can see from the graph up on your screen, the G7 represents only 30%.
	And according to that analysis, well, if things continue the way they're going, that gap will only get wider as time progresses.
	And these BRICS nations are right now making large moves to supplant the US dollar as the world's global reserve currency.
	For instance, just last week, you had a high-ranking Russian official who came out and confirmed what was rumored to be true for a long time, that the BRICS nations are indeed working to create a new global currency.
	Here's specifically with the deputy chairman of the Russian state Duma, meaning he is the Russian equivalent to our Kevin McCarthy.
	Here's what he said regarding this new currency.
	Quote, The transition to settlement in national currencies is the first step.
	We've already seen this occur with recent oil deals between India and Russia being settled in currencies other than dollars.
	The next step is to provide the circulation of digital or any other form of a fundamentally new currency in the nearest future.
	I think that at the BRICS Leaders' Summit, the readiness to realize this project will be announced.
	Such works are underway.
	The BRICS nations are developing a strategy that does not defend the dollar or the euro and that a single currency would likely merge within BRICS, pegged to gold or other groups of products, such as rare earth elements or soil.
	Meaning?
	That this group of nations, which represents again about 40% of the world's population and a growing portion of the global GDP, they are actively working on developing a new global currency that's tied to either gold and or some other types of physical assets in order to bypass the US dollar.
	And free reference, the BRICS Leader Summit that he mentioned in that statement, it'll be held in August over in South Africa.
	And this year's summit, well, it might be attended by more than just these five countries.
	That's because even though at this very moment, only the nations of Brazil, Russia, India, China, and South Africa make up the BRICS bloc, other nations are beginning to apply as well.
	Last year, you had the nation of Iran officially apply to join BRICS, and according to a report that was put out by The Cradle, several other nations have also been expressing their interest in joining the BRICS bloc as well, including Saudi Arabia, Algeria, the United Arab Emirates, Egypt, Argentina, Mexico, as well as Nigeria.
	However, the fact that this particular group of nations is growing in size, growing in GDP, and are getting ready to launch their own currency, well, these are not the only pieces of bad news for U.S. dollar hegemony.
	Instead, this is just the latest in a long trend of, I guess what you can call, global de-dollarization.
	For instance, late last week, the leaders of China and Brazil, they jointly announced a new trade agreement, wherein they will buy and sell from each other using their own national currencies and completely circumvent the U.S. dollar.
	Under this new deal, Brazil and China will carry out trade by directly exchanging the Chinese RMB with Brazilian reals, or vice versa.
	There will no longer be this intermediary step of converting their local currencies into U.S. dollars, even in the case of oil transactions.
	Here was a quote from Senator Marco Rubio.
	He was on Fox News just yesterday talking about this decision by Brazil to ditch the petrodollar and move on over to direct trade with China.
	Today, Brazil, in our hemisphere, largest country in the western hemisphere south of us, cut a trade deal with China.
	They're going to from now on do trade in their own currencies, get right around the dollar.
	They're creating a secondary economy in the world totally independent of the United States.
	We won't have to talk about sanctions in five years because there'll be so many countries transacting in currencies other than the dollar that we won't have the ability to sanction them.
	As we are sitting here, you know, focused on some of these nuttiness that's going on, people that are basically dedicating their lives in this country to ensuring that it is legal to mutilate children, to do drag shows in schools.
	They dedicate their lives to this.
	And we have another superpower that basically wants to become the world's dominant power at our expense.
	And these people don't want to focus on it.
	However, this is not only happening in Brazil.
	And instead, this ditching of the petrodollar appears to be a growing trend, a trend that's catching on around the world.
	For instance, at the Russia-China summit that was held last week, Vladimir Putin put out the statement, quote, We, meaning Russia, are in favor of using the Chinese Yuan for settlements between Russia and the countries of Asia, Africa, and Latin America.
	For your reference, it's already been the case ever since the beginning of the Russia-Ukraine proxy war that China has been purchasing Russian oil using both Russian rubles as well as Chinese yuan.
	Meanwhile, last week you saw a French company buying 65,000 tons of liquefied natural gas from the United Arab Emirates and for the first time ever, this French company paid for that gas in Chinese currency.
	This was the first time that such a thing has happened.
	France bought liquefied natural gas, it was shipped to them on a tanker from the UAE, and they settled the account on the Shanghai Petroleum and National Gas Exchange using, again, not U.S. dollars, but Chinese yuan.
	Then you have the case of Saudi Arabia, which has not only been moving closer and closer to China, such as by joining the Shanghai Cooperation Organization, But also, the government of Saudi Arabia has been expressing more and more willingness to accept local currencies in exchange for their oil.
	And along that line, just two weeks ago, the Saudi government, they agreed to accept Kenyan shillings as a payment for their oil shipments over to Kenya, again, instead of U.S. dollars.
	Then, you had the government of India.
	They recently came out and they offered the use of their currency, meaning the Indian rupee, as an alternative to the U.S. dollar for international transactions.
	Here's a short excerpt from Bloomberg reporting on this exact case.
	Quote, Then, along that very same line, just last week, you had a meeting over in Indonesia where the finance ministers of almost every nation in you had a meeting over in Indonesia where the finance ministers of almost every nation And at the very top of the agenda for this particular gathering...
	Well, they were discussing ways to, quote, ASEAN is, of course, the Association of Southeast Asian Nations.
	And so, whether it's the BRICS nations creating their own global currency that's backed by gold, or whether it's these individual nations choosing to transact on their own local currencies, what's becoming clear is that more and more countries are trying to minimize their exposure to the US dollar.
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	And now let's head on back to the studio.
	However, it is worth mentioning that everything we listed out doesn't necessarily mean that the US dollar will totally collapse in the coming year.
	The situation on this globe right now is that all countries on the planet are using fiat currencies, currencies that are printed into existence out of thin air by central banks.
	And all these currencies are collapsing in value in real time.
	You can see this clearly when you take a look at a graph of these currencies against something more stable, like gold.
	All fiat currencies are collapsing.
	It just so happens that the U.S. dollar is the strongest among the collapsing currencies.
	And furthermore, the U.S. dollar's role in the world economy is still huge, and it remains the most used currency by far.
	And this reality becomes quite obvious when you take a look at how much the U.S. dollar still dominates the foreign exchange reserves of different countries.
	What you're looking at on your screen right now is an animated timeline of the assets that are held on reserve by central banks around the world.
	And the way that you can look at these reserves is as essentially an indication of what these central banks are anticipating for the future.
	And at the moment, U.S. dollars still make up about 51% of all foreign exchange reserves, meaning that at least at this very moment, central banks are still anticipating that the U.S. dollar will be needed in order to engage in international trade in the near future.
	And the U.S. dollar is still far above even the second-place currency, which is the euro at about 20%.
	However, I believe it was Ernest Hemingway who once famously wrote this, quote, And indeed, even though right now the U.S. dollar still dominates foreign reserves, over the past two decades, its share of the vault space has been steadily declining, going from 62% in the year 2000 to only 51% today.
	Meaning that as time has progressed over the past two decades, even though right now most transactions are still done in dollars, these central bankers have been anticipating year after year less and less of a need for U.S. dollars in the international marketplace.
	And by the way, I think it's worth mentioning that this is not just a theoretical problem for bankers and financiers.
	If the U.S. dollar loses its world reserve currency status, or rather, when the U.S. dollar loses its world reserve currency status, you and me are going to suffer quite a lot.
	And there's many reasons for that.
	However, one of the most obvious reasons is that about half of the U.S. dollars that are in circulation are actually outside of the U.S. And so just imagine this for a moment.
	If the world suddenly realizes that they can trade in their own local currencies, that they don't need the U.S. dollar, well, what would happen?
	Naturally, they'll exchange their U.S. dollars for something else.
	Meaning that all of a sudden, all those trillions of U.S. dollars that have been held outside of the States will come flooding back into America.
	Now, people have been wondering for a while, how come the Federal Reserve's website says that the money supply has gone up 400% in the last few years, but the inflation rate is only 8%?
	Well, part of that answer has to do with the fact that a lot of that money isn't actually in America.
	It's overseas.
	That's what people usually mean when they say that the U.S. has exported its inflation.
	We have flooded the world with dollars, which lowers the value of each individual dollar, but it doesn't really feel that way here in the States because those dollars aren't actually in circulation here in America.
	Instead, they're held as assets in other countries.
	But if all that currency suddenly comes crashing back, if trillions of dollars suddenly show up in this country chasing the same products and services that are currently available, those products and services will suddenly become astronomically expensive.
	The rate of inflation might jump double or even triple digits.
	And so if you think $7 eggs are expensive, well, wait until you see $35 eggs.
	If you'd like to go deeper into anything that we've discussed in today's episode, I'll throw all my research notes down into the description box below this video for you to check out.
	And then, until next time, I'm your host, Roman from the Epoch Times.

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