BRICS nations, a group consisting of Brazil, Russia, India, China, and South Africa, have been reportedly purchasing massive amounts of gold in a bid to dethrone the US dollar as the world’s reserve currency. With the global economic landscape undergoing significant changes, the BRICS are determined to establish themselves as major players on the world stage. In this article by The Daily Hodl, we explore why these countries are amassing gold reserves, what it means for the US, and how it could potentially impact the global economy.
BRICS or Brazil, Russia, India, China, and South Africa are purchasing gold in large quantities as they are preparing to end their dependence on the US dollar. According to a report from the US Global Investors, BRICS countries are major buyers of gold and will continue to do so for the foreseeable future. Their accumulation of gold, particularly that led by China, aligns with the theory of the world moving towards economic bifurcation. Frank Holmes, the CEO and chief investment officer of the US Global Investors, said that for the first time, the share of BRICS countries in the global economy now surpasses the G7 nations.
The World Gold Council also reports that China has added 102 tons of gold to its stockpile since the start of this year. The reason behind this purchase of gold is to shift away from the US dollar and support their currencies as more and more global trade is now being conducted in the Chinese Yuan. Reports suggest that the BRICS countries, which may include other significant emerging economies such as Saudi Arabia, Iran, and more, are developing their payment medium and are in the early stages of designing a new currency aimed at ending global dependance on the USD.
Gold plays a crucial role in their potential approach towards a multipolar economic future as it is expected to be used to back the creation of a new currency that does not utilize the USD. The BRICS countries need gold to support their currencies to shift away from the US dollar, which has been serving as the global foreign reserve currency for about a century.
However, it is not yet clear how effective their efforts will be, with early critics saying that China will never effectively de-dollarize as long as the yuan remains pegged to the dollar. The development of a new currency that challenges the dominance of the USD in global trade and commerce is expected to shape the global economy significantly.
In conclusion, with the increasing shift of global trade from the USD to the Chinese Yuan and the formation of a new currency that may not utilize the USD at all, the world is moving towards a potentially multipolar economic future. Gold is expected to play a critical role in the creation of the new currency that aims to end global dependence on the USD, and BRICS countries continue to be significant buyers of this precious metal. While it remains to be seen how effective their efforts will be, the shift towards a multipolar economic future is expected to shape the global economy significantly in the coming years.
