The average American has no interest in the dollar or its dominance as the global reserve currency. Probably because our TikTok-watching nation can only focus on 30-second videos of teenagers dancing rather than attempt to understand basic economics. One would think we are doomed as a society, but the proletariat of the world is no different. It’s the economy stupid, but we would have to learn it before we can complain about it.
According to a poll cited by The Economist, 40% of Americans think that the Fed’s inflation target is above 10%. It’s 2%. An Economist/YouGov poll showed that twice as many Americans think that raising rates increases inflation rather than lowering it. An honest error.
The only thing we do pay attention to is the numbers on the sign at the gasoline station, which maybe the Fed might want to look at a little closer. So armed with this lack of knowledge it’s no wonder that our adversaries to the east plot economic dominance without us batting an eye.
Putting the economics aside for the moment, there is a current movement among the BRIC countries to replace the dollar as the world currency reserve. BRIC is an acronym for Brazil, Russia, India, and China, with South Africa being added to form what is now known as BRICS.
Even though these are large countries with enormous economies, they are still considered to be developing and emerging based on generally low GDP and being primarily agrarian in nature.
They are countries that some believe will be the dominant suppliers of manufactured goods, services, and raw materials by 2050. Brazil and Russia possess the raw materials and minerals while China and India will dominate the production and manufacturing of goods and services. Low labor and production costs let them dominate the world stage in this regard.
BRICS has garnered some attention of late as it has convened its fourteenth annual summit. Among the most interesting topics discussed were the future addition of Iran and Argentina to the group. The geopolitical alliance has been further divided from the U.S. and the west by sides being drawn in the Russian-Ukrainian war.
What could possibly go wrong from an alliance of these politically polar states to the U.S.? It’s back to the economy, stupid. I will say in fairness that I was not aware of this BRIC alliance in any shape or form until the writing of this article. The rhetoric of replacing the dollar is certainly of interest, but likely not of concern.
Putin announced at the BRIC summit that the coalition will not be using the U.S. dollar as they plan to go forward with creating a new global reserve currency that would be used, for among other things, to replace the petrodollar with whatever it is that they come up with.
According to Dipanjan Roy Chaudhury of The Economic Times, “The issue of creating an international reserve currency based on a basket of currencies of our countries is being worked out. The BRICS countries have been also boosting the use of local currencies in mutual trade.”
There are a myriad of reasons the dollar isn’t going anywhere soon, with the first just being the eye test. Other than ostensibly Brazil, the world stage is laughingly unlikely to sign on to a currency backed by Russia, China, and Iran. Hello! Those conspiring against the dollar and the U.S. have little to back up such rhetoric.
The Hill reported, “The hegemony of the U.S. dollar was reliant on America’s hegemonic status in the world. With the world moving toward multipolarity and with the U.S. no longer the world’s largest trading nation (it is China) the power and status of the dollar could be waning as well.”
That argument is well noted and true. However, there is no alternative option. Even if 100 countries of the world decide not to use the dollar, the alternative currency backed by bankrupt Russia and the other despotic nations won’t hold up.
It will have the volatility of cryptocurrency and will unenviably crash and burn. One must remember that these are Orwellian, totalitarian entities, incapable of and unwilling to do what is in the best interest of their people. The surfs will never be on board because they can’t, thus having Marxist ideology throughout whereby one percent of the populous rules ninety-nine percent of the people.
History shows that this never works, from revolution to revolution, with the proletariat always rising.
This inner conflict will certainly be much more deleterious to this new world reserve currency than to it replacing the dollar.
It’s likely that in the future China will be in the BRICS alliance in name only, as its GDP and economic advancement vis-a-vis agriculture to manufacturing and production gain even further traction in the world. Every American reading this should hope I am right.
The consequences of actually having the dollar replaced are truly draconian. I won’t lay them out now, but let’s just say we don’t want to go there.