Russia recently announced the possibility of the gold market’s new bullish momentum with the introduction of a new trading currency backed by gold. This compounds the de-dollarization trend unfolding in the global economy, which included the prevalent historic pace of purchasing precious metals by central banks worldwide since the middle of 2022 to diversify their reserve away from the U.S. dollar.
According to state-run international news portal RT, Russian President Vladimir Putin’s administration confirmed that Brazil, Russia, India, China and South Africa (BRICS) are set to announce at the BRICS summit in August in South Africa the launch of a new gold-backed trading currency.
“With the growing initiative, more and more countries are lining up to join the group,” the news outlet wrote.
BRICS plans to introduce new gold-backed currency
Follow us on Rumble: https://t.co/Nuc9nUzTc5 pic.twitter.com/WnkHCN0j7Y
— RT (@RT_com) July 6, 2023
Meanwhile, former journalist Willem MiddelKoop tweeted that 41 countries have applied for BRICS
There You Go – It’s Official
‘BRICS planning to introduce new trading currency backed by gold at August summit’
‘Gold standard will be a great benefit to strengthening single currency’
‘41 countries have applied for BRICS-membership’
Source: RT / Russian Embassy pic.twitter.com/zmqOKiXlsa
— Willem Middelkoop (@wmiddelkoop) July 7, 2023
The developing trend of steering away from the American dollar has received various opinions on how it would devastate the dominance of the United States currency. Some suspect China’s recent gold purchases are an attempt to bring international credibility to the yuan. President Joe Biden’s regime weaponizes its USD against Russia as a form of sanction for invading Ukraine. Of course, this has created some geopolitical uncertainty among some nations allied with Russia.
To others, it is unlikely to replace the dollar and the new gold-backed currency would exist only as an addition to the established dollar-based global monetary system. An official Monetary and Financial Institutions Forum report said, “It will be a regional initiative rather like the euro.”
Though a good measure, expert Thorsten Polleit believes steering clear of the USD is still far-fetched. The Degussa chief economist said that while the announcement is a step in the right direction, there is still a long way to go to become a reality. “At first glance, a new transaction unit, backed by gold, sounds like good money and it could be, first and foremost, a major challenge to the U.S. dollar’s hegemony,” he said in an exclusive comment to Kitco News.
But the devil is in the details, Polleit warned. According to him, to make the new currency as good as gold, a truly sound currency, it must be convertible into gold on demand. He said he was not sure whether this is what BRICS has in mind.
“Using gold as money, the unit of account would be a true game changer, no doubt about it. It could lead to a sharp devaluation of many fiat currencies vis-à-vis the yellow metal (including the BRICS fiat currencies), and it could catapult up goods prices in terms of fiat currencies. It could be a shock to the global fiat money system. I am not sure that this is what the BRICS wish to achieve,” he said.
Another option would be for the BRICS nation to create a new bank for financing foreign trade that would require holding gold as capital, Polleit volunteered. “Against this gold stock, the new bank could say, grant financing loans to exporters, and issue the “new currency;” or BRICS exports will be sold against the “new currency” and/or gold,” he said. “I think it is fair to say that it is early to come up with a final conclusion where this will lead us to – we need more details.”
Chief Investment Officer at Zaye Capital Markets Naeem Aslam mirrors the same sentiment. According to Aslam, the precious metal continues to face short-term challenges and despite the announcement, the world is still far from seeing a gold-backed currency.
“But this doesn’t mean this can’t be achieved at all,” he said. “For now, any additional positive news on this could certainly help the gold price, but more importantly, traders are now going to be focused on the U.S. CPI data, which is due next week.”
SCO to shift to domestic currencies for financial transactions
The Shanghai Cooperation Organization (SCO) member states like the BRICS nations are planning on ditching the dollar eventually, according to the Eurasian political, economic, international security and defense organization’s latest virtual 23rd SCO summit on July 4, where a landslide decision to conduct the majority of transactions in national currencies instead of the American dollar, following Iranian President Ebrahim Raisi’s proposal, was agreed on.
Raisi warned against the world’s dependency on USD in global exchanges and pointed out the importance of de-dollarization to form a just international system. “Based on the experience of the past decades, it is now obvious that militarism and the dominance of the dollar form the bases of the Western domination system,” the president stressed. “Therefore, any attempt to shape a fair international system requires the removal of this instrument of dominance in intra-regional relations.”
Prime Minister Narendra Modi, who chaired the meeting, Putin, Chinese President Xi Jinping and Pakistan Prime Minister Shehbaz Sharif were all in attendance at the summit.
Read more about how the U.S. dollar is slowly weakening at DollarDemise.com.
Sources for this article include:
Independent Journalism Is Dying
Ever since President Trump’s miraculous victory, we’ve heard an incessant drumbeat about how legacy media is dying. This is true. The people have awakened to the reality that they’re being lied to by the self-proclaimed “Arbiters of Truth” for the sake of political expediency, corporate self-protection, and globalist ambitions.
But even as independent journalism rises to fill the void left by legacy media, there is still a huge challenge. Those at the top of independent media like Joe Rogan, Dan Bongino, and Tucker Carlson are thriving and rightly so. They have earned their audience and the financial rewards that come from it. They’ve taken risks and worked hard to get to where they are.
For “the rest of us,” legacy media and their proxies are making it exceptionally difficult to survive, let alone thrive. They still have a stranglehold over the “fact checkers” who have a dramatic impact on readership and viewership. YouTube, Facebook, and Google still stifle us. The freer speech platforms like Rumble and 𝕏 can only reward so many of their popular content creators. For independent journalists on the outside looking in, our only recourse is to rely on affiliates and sponsors.
But even as it seems nearly impossible to make a living, there are blessings that should not be disregarded. By highlighting strong sponsors who share our America First worldview, we have been able to make lifelong connections and even a bit of revenue to help us along. This is why we enjoy symbiotic relationships with companies like MyPillow, Jase Medical, and Promised Grounds. We help them with our recommendations and they reward us with money when our audience buys from them.
The same can be said about our preparedness sponsor, Prepper All-Naturals. Their long-term storage beef has a 25-year shelf life and is made with one ingredient: All-American Beef.
Even our faith-driven precious metals sponsor helps us tremendously while also helping Americans protect their life’s savings. We are blessed to work with them.
Independent media is the future. In many ways, that future is already here. While the phrase, “the more the merrier,” does not apply to this business because there are still some bad actors in the independent media field, there are many great ones that do not get nearly enough attention. We hope to change that one content creator at a time.
Thank you and God Bless,
JD Rucker
