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While most people are distracted by mainstream news (or cool video games), a new development is brewing in the financial world that will most probably impact our lives, one way or another and could come as soon as within three weeks, later this month and that is the very real possibility of a new, gold backed currency hatched by China and Russia.
BRICS stands for Brazil, Russia, India, China and South Africa but there are actually several dozen countries that have expressed a desire to join the bloc, hence the new title. This would consist of approximately half the world's population.
At present, we are living in a debt-based financial system. It appears we are in the process of entering a new financial paradigm but first we have to endure living through the death throes of the old one. U.S. national debt recently surpassed $32T and there's no stopping it now that the debt ceiling has been lifted altogether with the recent McCarthy / Biden debt ceiling deal that will add another $4.5T to the national debt in short order. Interest payments alone are set to hit $1T for the first time ever. As a result, the U.S. dollar as we know it is facing an existential, inflationary crisis.
Delving a little deeper into the BRICS+ supposed plan for a new, gold backed currency, there hasn't been any official word from any of the member countries, except for a leak from the Russian embassy in Kenya (see links below). A summit set for August 22-24 in South Africa is fast approaching and there is no doubt that trade among member countries will be a top priority in discussions. The Russians and the Chinese have already developed an international currency trading platform to counter the U.S. led S.W.I.F.T. system. This makes it a real possibility they'll introduce a new currency to trade among themselves, much in the same way as the European Union did with the Euro and of which 20 of the 27 member countries use today.
The only difference is there is speculation this new currency, unlike the Euro, will be backed by gold or maybe even a basket of commodities but it appears more likely that gold will be the backing of choice and that it will be weighted to gold. For example, let's say one unit of this new currency would be worth one gram of gold. This would be a fixed weight, not price that cannot be inflated unless you add more gold to your reserves.
Something like this would be a game changer and likely spell the demise of Bretton Woods II but not so fast! This would take several more years to play out as many of the BRICS+ countries depend on the USA for trade as much as they do other BRICS+ countries, including China. The dollar is still the number one medium of exchange around the world and impacting it with a new, gold weighted currency would cause volatility with the dollar. The Chinese have some $3T in U.S. Treasuries. Wouldn't it suck for them if the value of their holdings suddenly tanked. Those treasuries are in a way, backing the Yuan. For that, I don't see China wanting to hurt their own currency right now by attacking the dollar.
Everyone is speculating as to what will happen in a few weeks, including myself. I'm guessing they'll make a formal announcement but will not implement this new currency right away, knowing it would cause too much disruption if they did so. It would be in their better interests to allow the West time to prepare. Unfortunately, the way things are going, it's more likely the West will continue to print more money and inflate away, that is, until they can't anymore.
Is this where the comes in???
I first heard of the Amero around the year 2007. The rumor was that the U.S.A., Canada and Mexico would form a new currency block using the Amero but is generally dismissed as a silly conspiracy theory. While having a significantly smaller population compared to BRICS+, North America truly is a giant among giants when you factor in its vast amounts of resources. An Amero could easily be backed by a basket of commodities, including gold and silver and would be a significant challenger to the new BRICS+ currency.
For now though, the Amero remains just that, a conspiracy theory. What isn't a conspiracy is that together, Canada, the U.S.A., and Mexico consistently top the list of gold and silver producers in the world. If the BRICS+ countries do announce some kind of commodity backed currency on August 22-24, then it's just a matter of time until we have a Bretton Woods III occur.
Looking back at the 20th century, there were many financial upheavals including the Crash of '29, followed by the Great Depression and WWII but also Germany's hyperinflation of the early 20s, the devaluation of the French Franc in the 1950s, removing silver coins from circulation in the 1960s and the U.S. dollar's decoupling from gold in 1971.
Change is constant, although it usually appears very subtle. Our modern times are no different. All this talk of a new currency to challenge the dollar means we should be paying attention because we could find ourselves in a not so subtle, very abrupt change into a new financial paradigm very different from the one we have today. Many currencies may become worthless while others would be severely devalued.
Greg Hunter recently interviewed Jim Rickards in which Rickards, speculating the new currency is named the BRIC, says that while weighted to gold, would not actually be redeemable in gold and simply used as a medium of exchange to avoid constantly moving gold around and since it would be weighted to and not anchored to gold, it would increase in value against the dollar if the price of gold went up in dollar value.
Now, that's something to ponder isn't it? Years from now, historians might look back on the upcoming BRICS+ summit as the moment the old financial system hit a brick wall, pun intended.
I'm now also on Substack where I will soon begin new podcasts as well as post extra material.
Previous Posts:
Spent money is not saved money.
USA DEBT: $32 Trillion and counting...
San Francisco - Echoes of old Detroit
Fed finally pauses after most aggressive rate hike in its history.
Time for a winter to spring gardening update.
M2 money contraction + rate hike double lag effect
Silver's massive 237 million ounce deficit
Never before seen divergence between silver and gold.
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