By Bitcoin.com - 9 months ago - Reading Time: 2 minutes
Economist Jim Rickards States BRICS Currency Will Leverage Gold to ‘Destroy the Dollar’
Jim Rickards, economist and best-selling author, has explained the possible repercussions of issuing a BRICS bloc currency for the dollar. For Rickards, the “bric” (the name he gives to the BRICS currency) will be anchored (but not redeemable or backed) to a weight of gold and will be used for debasing the dollar by propping up commodity prices.
Jim Rickards Speculates BRICS Currency Will Be Anchored to a Weight of Gold
Jim Rickards, economist and best-selling author, has commented on his vision of a hypothetical BRICS (Brazil, Russia, India, China, and South Africa) bloc currency and how it could be leveraged to devalue the U.S. dollar.
To Rickards, the “bric” — the name he gives the BRICS currency — will be anchored to a determined weight in gold, but not backed by it. This is because the BRICS nations will free-ride on top of the gold markets without intervening to manage the bric-dollar peg.
This will also allow its price to go up as inflation and devaluation hit the U.S. dollar, ostensibly leading to the greenback’s destruction. On this, Rickards stated:
It’s a way to destroy the dollar. You don’t need dollars and you don’t need gold. You just need to be smart enough to anchor your currency to gold, and when dollar inflation starts to go up, your currency is going to be worth more because of how you pegged it, not to dollars, but how you pegged it to gold.
However, Rickards acknowledges that this might take years to happen.
Disrupting Supply Chains
Rickards stated that another way of turbocharging the debasement of the U.S. dollar would be to interfere with the supply chains of commodities in the world. He mentioned the end of the Black Sea grain deal between Russia and Ukraine as an example, stating that grain prices went up by 10% just after the announcement of the suspension.
On this, Rickards explained:
So, if I were a BRICS member, and I were Russia in particular, and I had this currency tied to gold, and I wanted my currency to be more valuable and your currency (U.S. dollar) less valuable, one of the ways to do that is mess with the supply chain and drive up the price of oil, gasoline, grain.
In January, Russian Foreign Minister Sergey Lavrov stated that the bloc would discuss an official currency this August. However, South Africa’s diplomat in charge of BRICS relations, Anil Sooklal, recently declared this topic was not on the agenda for the upcoming summit.
What do you think about Rickards’ thoughts on the hypothetical BRICS currency? Tell us in the comments section below.
Original source: Bitcoin.com