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May 16, 2025 - Ron Paul Liberty Report
30:00
Is BRICS Coming for the U.S. Dollar? A Financial Breakdown with Phillip Patrick of Birch Gold

In this eye-opening discussion, we sit down with Phillip Patrick of Birch Gold Group to explore a pressing question: Is BRICS coming for the U.S. dollar? As the alliance of Brazil, Russia, India, China, and South Africa pushes for a shift in global financial power, what does it mean for the future of the dollar, and how might it impact your savings, investments, and the global economy?

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Dollar's Nervous Decline 00:05:58
Hello, everybody, and thank you for tuning in to the Liberty Report.
Once again, we have the honor of having the economist from Birch Gold, Philip Patrick.
He's been with us before, and we will be talking about various events that are getting people a little bit nervous about the dollar.
And I've talked about the dollar for a long time, and I don't think it's in good shape.
But right now, the whole world is starting to think that, and it's a big issue, and that's also the reason that gold is no longer $35 or $100.
It's into the thousands of dollars.
And most people, at least a lot of the people paying attention, realize that this is just maybe the beginning.
And what we're going to talk about a little bit today with Philip is, you know, what this might lead to.
But first, Philip, welcome to the program again.
We're glad to have you.
Thank you so much for having me, Dr. Paul.
It's an honor.
Very, very good.
You know, I want to start off with reading something that just recently appeared in Zero Hedge that, you know, I didn't know the exact numbers, but I knew it existed.
But the numbers they report and emphasize is a dramatic number.
And this was just put in yesterday or the day before.
And the title was Bail In Risk Rises as Shadow Banks Hit 49% of all global assets.
Well, what does all that mean?
And they go on to explain this.
And Philip, this sort of sets the stage for what we're trying to deal with and what's happening.
And this is reading from Zero.
While the media fixates on interest rates and inflation, a $250 trillion shadow banking monster quietly grows, hidden from traditional regulation.
Hedge funds and private equity funds operate with 100 times leverage, taking massive risk backed by the various banks holding your savings.
Now, that's astounding.
I know we're going to be talking a lot about Rio Reset and BRICS, but do you want to make a comment on this, on this shadow banking?
Those are numbers that are astounding, but that sort of makes the problem a lot worse than even I had been thinking about.
Yeah, I mean, it's absolutely frightening that banks can operate with that level or institution, shadow institutions even more concerningly, with that level of leverage.
And if we look at financial markets globally at the moment, they are teetering.
So, yeah, it's concerning to say the least.
Look at what's happening with the BRICS now as well.
Central banks around the world amassing assets at a huge level, gold being one of those assets.
So, yeah, it's frightening, but I think leverage today is the name of the game.
Look at debt to GDP amongst Western nations.
Things are getting out of control, and I think we're heading towards a tipping point.
I agree with that for sure.
You know, we hear a lot about BRICS and the organization, but I want to refresh everybody's mind about exactly who's in BRICS, because the list is a little bit longer than mostly, most of the time we refer to.
Of course, the five originators, so to speak, Brazil, Russia, India, China, and South Africa.
They're the ones that we mentioned a lot.
But sort of fellow travelers, Indonesia, Iran, Egypt, United Arab Emirates, and Saudi Arabia.
So they're lining up and they're keeping their, and they may well attend this Rio reset that's coming up soon.
And I think this is a reflection, the fact that there's a lot of, even central banks dealing with this, not that they're going to have any answers, but they're reflecting how big the worry is.
But could you explain a little bit what this term is, Rio reset, and how significant it is?
I think they had some meetings before, a pseudo-meeting a few months back or a year back, but now they're meeting again under more dire circumstances.
It's absolutely correct.
So this is the 17th BRICS summit, and it's going to take place July 6th to 7th this year, and Rio will be hosting.
Officially, it's another working session between bureaucrats.
They're talking about economic cooperation, international prosperity.
Unofficially, though, the BRICS leadership are expected to announce major advancements in their shadow financial system.
This is basically a 21st century alternative to the existing dollar-denominated system.
I'm talking about institutions, you know, messaging systems, regulatory bodies.
They have it all.
And what inside sources are hinting at now is a coordinated push to link the various systems that they've been developing, things like Enbridge, BRICSPAY, and commodity settle trade, with the goal of making dollar-free international transactions, which are happening already, by the way, but to make them possible at scale.
Ultimately, this is a culmination of their ongoing project to insulate their economies from American sanctions and to sort of reduce the dollar's monopoly and ultimately, longer term, end its global reserve currency status.
So it's concerning, and the BRICS are certainly gathering steam, as you mentioned.
Indonesia, Nigeria now looking at membership, two large countries.
New Currency on the Horizon 00:08:07
You know, with central bankers, they're supposed to be geniuses about how to run the economy and what to do and what interest rates are.
And I've harped on that for a long time because they can't know.
The market only decides what the real value is.
But central planners and politicians in Washington, their greatest fear is deflation.
And even our new administration that's trying to make an effort to cut back and express these concerns, the budget's not going down the way I see it.
And they're not going to pass the plans for Code Doch because the people don't want it.
And the congressmen aren't going to take the risk.
So they're going to inflate and the deficit is going to go up, but they fear deflation.
That's what they fear.
But deflation is a pressure by the market because once you print too much money and spend too much money and you have malinvestment and too much debt, the market says it's too much and they're trying to warn us and say, get rid of the debt.
Most people know this as an individual.
When they're an individual, they know, well, I borrowed a million dollars.
I think I better watch out.
The banks are calling me all the time.
But the banks aren't very reliable.
They don't call.
They keep printing.
And so their goal, and I think that's the contest they have.
And that's what they're actually trying to do.
BRICS, is it going to be a new currency?
Well, most of us think the dollar is going to continue.
It's downswing and it couldn't be much worse.
So is it need a new currency?
Certainly do.
This one's gone badly.
Even the dollar, our system was Considered sort of bankrupt in 1933 during the depression when they stole all the gold and took it in.
And then when Bretton Woods failed, they wouldn't even allow foreigners to deposit dollars to get their gold back.
So that's been there, and it's continuing to do this.
So the question is, can we simply say, oh, let's make a new currency?
It's not quite that easy.
And also, what BRICS is trying to do is probably a combination.
And sometimes I don't have overconfidence in government-oriented individuals that come up with it.
But they have to deal with the issue of a currency that would be universally accepted, like the dollar was after World War II.
And also, they have to deal with the system itself, the financial system.
And that's, you know, the trade in dollars.
And now we're in a squabble about tariffs and control on some of this stuff.
So I see this as a major, major challenge, but I think it's a message that should be listened to because the numbers are growing of people and the people in the street, main street, are starting to realize there's something wrong with this.
And I saw some statistics the other day that, oh, inflation isn't so bad.
The rate is down to about 2%, and that's good.
And yet, somebody else came up and said, this is what I paid last week in the grocery store.
So would you agree that they have a job dealing with the issue of currency itself as well as the financial system?
A huge, a huge job, right?
And the dollar has cemented its position as global reserve currency because it has been so stable for so long.
Even since the 70s or post-71, when it wasn't redeemable, stability was characteristic of the dollar.
Today, that's not the case, though.
So is there a natural suitor waiting in the winds, the wings to overtake the U.S. dollar?
The answer is no, right?
The BRICS have a currency.
It's called the unit.
Talk is they're going to peg it to gold to give it some stability and legitimacy longer term, but it's not ready to overtake the dollar.
But the reality is the BRICS don't really need a new currency yet.
Look at what they're doing.
They are buying gold and they're using that as a means to de-dollarize.
U.S. dollar holdings by central banks today are at 30-year lows.
Central banks for the last three years have set records for gold buying consecutively.
And actually, officially, last year, gold became the number two global reserve asset.
It overtook the Euro and became number two.
And it was a function of central banks around the world selling dollars and buying gold.
The point here is they are already de-dollarizing and they're using gold as a currency.
Longer term, what that does is it weakens the argument for the dollar, right?
The less global demand there is for the dollar, the weaker the dollar becomes.
Therefore, the weaker the longer term argument starts to become for the dollar as the global reserve currency.
Like I said, I don't think we lose reserve currency status tomorrow or the next day or even next year.
But I think what could happen is we start to see more and more international transactions happening outside of US dollars.
As that happens, dollar value declines longer term.
And then when there is a natural suitor that's ready to overtake, we officially lose the status.
And at that point, the game is up.
People have to understand this is history, right?
Global reserve currency status always changes, usually lasts between 90 and 110 years.
We're right in that range at the moment.
So even history suggests a change on the horizon shortly.
You know, I think one of the most important things, the system is very important and how we transact our financial activity.
But the unit of account, the currency that we use, the founders understood this because we had the runaway inflation with the continental dollar.
And they knew, because they knew history, and they probably read Aristotle.
Aristotle had some advice for us, believe it or not.
He said that the money has to have three major qualities.
Others list more than three.
But Aristotle listed three qualities of what we should have in the currency.
We should have a unit of account, know what it is and define it.
We have to have a means of exchange, be able to use it in exchange, and the people accept it.
And it has to have a store of value.
And that's been known since Aristotle, and the founders knew that.
And that's why we had a dollar.
And it was a silver dollar.
It was a precise weight of silver.
The fallacy or the shortcoming then was they had a fixed ratio between the silver and gold, and that was not right.
You should have, if they would have allowed an adjustment for that.
But no, it did not work as well.
And that's why one of the reasons why this thing failed.
So I know the transactions are very important, but if you deal with financial transactions, and that's what they do all the time.
We'll have more regulations.
Oh, yeah, the Fed screwed up on this one, but we'll have a regulation and the Congress does this.
We'll regulate.
So the Federal Reserve is a regulation department.
It's a taxing department.
That's how they pay the bills.
They print up the money, pass it on to the Treasury, and pay the bills.
So I don't see how my point here is I think that the use of gold is important.
That's a step in the right direction.
But I don't think many of them are looking at what, say, a Murray Rothbard would suggest.
He thinks it should be convertible.
And that's what it used to be.
I mean, I remember when I could take a dollar to the bank.
Empire's Unaffordable Wake 00:05:23
That's not very long ago.
I took a dollar to the bank and I got a silver dollar back.
But you can't do that now.
So the silver, you can't even take a dollar and ask for 100 pennies.
Copper pennies.
You can't do that.
The copper has been taken out of it.
But, Philip, I think it all goes back to why, why, why?
And most of the time, we end up by saying debt, debt, debt.
And the people demand it.
The special interests demand it.
And we end up with this mess.
But I think that we're at a point where the people, the banks, everybody has to confront this, not just a few of us, you know, talking about it.
And there's always been somebody ever since the beginning of our country always warning against this.
But right now, I think the people are waking up.
And I think one of the things that we can do is try to educate people on monetary policy, but also help them try to protect some of their assets under these conditions.
Yeah, I mean, I agree vehemently.
And that's why it's so important, like you say, to educate people.
History teaches us a lot of lessons.
And this is not a new story, right?
A nation becomes an empire, wants to expand the empire, increases the money supply, dilutes the potency of money, and collapses the empire.
This is how almost every empire in history has collapsed.
And, you know, the situation at this point with $36.5 trillion of debt with $1.13 trillion in interest payments on that debt in an annual basis, it is a dire position.
Niall Ferguson, a British historian, has Ferguson's law.
Ferguson's law has been true of every empire in human history, and it is this.
When any great nation spends more on debt service than defense, the empire will collapse, right?
So, you know, we need to understand how dire a situation we are in, and we need to start addressing the problems.
As you mentioned before, I don't think at the moment we close that deficit.
We have to find a way to do it.
I was encouraged by Doge at the beginning, but it's looking more and more difficult to plug that gap, but it is becoming more and more urgent to do it.
And we can see it, right?
Even in President Trump's negotiations, he wanted to stand firm on tariffs.
He's not going to U-turn.
And then ultimately, he U-turned.
And he didn't really have a choice, right?
China and Japan dumped U.S. debt.
Borrowing rates skyrocketed and it forced us to the negotiating table.
It tells you what a tough position we're in.
But if we don't start curbing the spending, it's going to be too little, too late.
You know, 2008 was an interesting period of time because the recession was very deep and a lot of worrying going on.
And the planners and the people who print all the money had a great deal of concern.
And at one time they offered up a credit of $700 billion.
They didn't use it all, so they figured they were making progress.
But it was nearly a half a trillion dollars.
And that was a bad recession that was happening and a lot of fear mongering there.
But now, today, this bubble, this distortion is much bigger than I think of 2008.
And that's why people are waking up.
And some of the things that are debt written and which will make a difference, I think this idea when you pay too much interest, you have to borrow the money to pay for the interest on the national debt.
Household debt is up to $8 trillion.
I imagine as these households are getting poorer and poorer, there's going to be bailouts.
They will not allow their psychology as we can't possibly let people know there's a deflation.
We do that.
They will print to the hilt.
That's why, you know, until they come up with a better system, there will be inflation.
And inflation to me is the increase in the supply of money and pushing prices up.
But we have the $36 trillion national debt and trillion dollars.
So it's out there.
And we're not going to pay it off.
That's why we have to start planning to what can we do.
And that's not an easy task.
But over all of history, you know, our country started with the precious metals and we ought to respect it.
It took a long time to totally remove that from the system.
But people go back to that at times over the years.
And, you know, they're talking about a percentage.
And a percentage is better than nothing.
We actually went a long time with Americans not owning gold, but a percentage backing for foreign depositors.
But as long as people trust the reserve currency, which was a trust I believe was undeserved for the dollar, because we had military might and we had a lot of raw materials and we were able to do it.
So we got away with, you know, sort of endorsing, expanding, and still feel financially responsible for an empire which we can't afford anymore.
Gold As Protection 00:10:23
I mean, it's what a good summary.
You're absolutely correct.
And I also agree with you that there's no way we pay down this debt through traditional means.
So historically, as you say, the only way that you get through it is you keep printing money to meet your debt liabilities.
And ultimately, you inflate the value of the debt away.
But we need some drastic solutions.
And I'm not sure where they lie.
I've heard a number of different things being touted, whether it's debt forgiveness, 100-year zero-coupon bonds, whatever it might be, there's a lot of solutions being touted.
But one thing's for sure, the status quo, tightening the belt buckle, that's not going to do it at this point.
So I agree vehemently.
You know, this Rio Reset is coming up in July.
I want to know what your opinion is.
What do you expect?
Do you think there might be something helpful and we'll get another period of time of more calm?
Or do you think something major can happen?
Do you have any optimism at all?
Or do you think this is just fluff?
Look, I'm getting concerned.
I don't think it's a case that they meet on July 6th, 7th and come out on July 8th and there's this announcement that we're not going to be touching U.S. dollars anymore.
I don't think it happens like that.
But what we are seeing is increased cooperation, right?
We saw Putin with Xi, Chinese, North Korean, and Russian troops all marching in unison.
So the world is diverging and grouping up, if you will.
It is not a case of if the BRICS start to do this, right?
It's a case of how much steam it can gather, right?
If we've got to look at what a financial system is, it's nothing more than a set of rules, infrastructure to move messages between institutions and institutions to enforce the rules.
Over the last 10 years, as I sort of hinted at earlier, BRICS have been building those institutions.
They have their own credit rating agency to rival Moody's and S ⁇ P.
They have an IMF-style liquidity pool called the Contingent Reserve Agreement.
And most importantly, they've laid thousands of miles of physical undersea cables to ensure independent communication away from our oversight.
There is a huge amount of work that goes into that.
So the question is not will they start to transact outside of dollars.
The question is at what scale will it happen?
The concern for me is it's two sides of it, right?
One has been our weaponization, right?
Our global involvement.
U.S.-led sanctions increased by 900% following 2001.
That disincentivizes countries like Russia and China to hold huge amounts of U.S. dollars that can be seized at our whim.
The second side of it is what we've discussed, right?
It's devaluation.
Why would you finance a nation who's continuingly increasing the national debt, printing money to do so and devaluing the currency that you invest in?
It doesn't make sense.
So, you know, we have this issue where we've massively increased supply of currency and we're getting hit on the demand side, which is a very dangerous combination.
So I don't think it's a case of if it happens.
I think it's a case of how quickly it happens and what we can do to stave it off.
The BRICS are not a natural alliance, right?
There are cracks there, and we can use that to our advantage and slow this down.
But I fear it's the best we can do.
Very good.
You know, the central banks are buying gold that we hear, and statistically they are purchasing gold.
And that is a good sign.
But it's hardly a gold standard, but it's emphasizing that they understand a little thing about gold, and I'm sure they've always understood it, but they were milking the system until a certain point.
And I think we're at that point.
And right now, we have a lot of individuals trying to do the same thing, but it's not easy.
So often, these conditions lead to violence because there'll be discrepancy in health distribution.
And that's notorious when you have a fiat currency.
And the people who have access to the newly printed money have an advantage.
And this whole thing of the banks now working outside the system is it means it doesn't even hardly get mentioned or measured, but that sort of exists because there's so much money out there.
And I would think that's being very, very vulnerable.
But, you know, we had the gold standard, and there was a time where you could take in your dollars and get an ounce of gold and this sort of thing.
But that's long gone.
And that, of course, was the way with silver.
And Murray Rothbard always emphasized that if you want to have a gold standard, you have to get to that point where if the people who use the certificates are honest, our governments really aren't honest with us because they run up these deficits and claim they're going to do all these good things for us.
And all of a sudden, we have this maldistribution.
I see that as a great danger because there are now we don't talk about millionaires.
We talk about billions.
No, we talk about trillionaires.
They're talking about how many trillionaires do we have today?
So that I think should be a concern.
So that's why I think a meeting like this, what the tone is, is very important.
And the fact that they're thinking about is one thing, but coming up with an answer and going toward a system that people can trust in is a big chore.
It is.
It's huge.
And, you know, it's hard to argue.
You know, for us in the U.S., losing global reserve currency status is a frightening proposition, right?
It has given us exorbitant privilege.
It has allowed us to become the wealthiest nation ever in history.
Losing that status is a frightening proposition.
But the flip side is if I'm sitting in China right now, right, and I have large exposure to the U.S. dollars.
I have aspirations to take Taiwan and cement myself as a global leader.
It doesn't really make sense to continue to hold dollars at the level that they have been.
It really doesn't.
Now, they are scrambling now for a solution.
They're scrambling now to diversify.
And I think that's ultimately where we're heading: to a more multipolar world.
Things like tariffs and even tariff negotiations have implications, right?
Prior to 2016, when Trump slapped tariffs on China, we were about 35 to 40 percent of their exports.
Today, we're 15 percent, right?
China realized the weak point and they're diversifying.
And I think that has now happened from a currency standpoint as well.
It's why we're seeing gold prices shoot up, and it's why I expect we will continue to do it.
Very good.
I have for years emphasized the point of education, you know, to result in good policy.
And I still think that's the case, and people want to know what to invest in.
I said, Well, if you really want to invest in something important, invest in liberty, and the people will figure it out.
But it's not quite that simple.
People don't accept that.
But you're the economist for Birch Gold, and Birch Gold has an approach to try to help people protect themselves.
And I partner with them and try to promote the ideas of gold and how to help people use gold as a protection.
That, of course, is not going to solve the problem, but it's still necessary and important because if what's true, if what we think is true, there's going to be a problem.
So why don't you just mention what Birch Gold does and what they might offer as far as information goes?
Yeah, of course.
So information is key because I think understanding the problems and really understanding them, then solutions become very easy.
You know, everything we're talking about, we're talking about the dollar losing buying power longer term.
We're talking about the cost of living increasing.
This is natural when you have, you know, when you've increased the money supply at the level that we have.
And gold is the way to protect against that.
For us, like I said, information is very important.
So for your viewers, we have free information kits on how and why to invest in gold under a Trump administration.
We have guides on the history of the Federal Reserve.
So a lot of information, a lot of good stuff on how we got to the position we are today on modern monetary theory, the Federal Reserve, all of it.
So information is key for us.
For your viewers, they text Ron to 989898.
That will get them access to all of the free information.
I think in this climate, we have to immerse ourselves.
And you're correct in what you said.
Look, buying gold is not going to fix the problem, right?
Fixing the problem, we're kind of limited.
We can vote for the politicians we think reflect our morals, our ideals.
But that's about it, right?
Outside of that, we've got to scale it down and we've got to say, okay, we know where the problems are.
How can I protect myself and those around me?
And I think precious metals are a very important tool to be able to do that.
So I would encourage everyone to get the information.
It's Ron to 989898.
Read, and whatever they want to do from there, they do.
Very, very good, Philip.
And I want to thank you once again for joining us.
And I want to thank our viewers for tuning in today.
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