BRICS nations, led by Russia and China, are determined to insulate their economies from the U.S. dollar. Brandon Smith explores the current geopolitical landscape and concludes, quite simply, that the dollar’s days are numbered…
In October of 2024, Russia hosted the annual BRICS Summit in the city of Kazan with the intent to show unity among developing nations and general eastern interests. The Kremlin, a target of severe NATO sanctions since the start of the war in Ukraine, has been effective in solidifying economic guarantees from BRICS partners and circumventing western economic controls.
Despite being removed from the SWIFT banking network and being cut off from a large percentage of global trade, Russia has continued to collect solid export revenues.
The reason? Russia is resource rich, exporting crude and refined petroleum, coal, wheat, gold, platinum, wood, copper, fertilizers and so on. But, due to the NATO sanctions on Russia, these raw materials can’t be bought by the west. Instead, Russia sells at below market prices to non-NATO nations (mostly China and India).
Here’s the thing: Russia’s economy has thrived despite financial sanctions.
Western European nations that relied on Russian energy exports (Germany, Italy, the Netherlands) suffered shortages, surging prices and anemic growth. For Russia, this was an inconvenience. But that’s all.
These backfiring sanctions demonstrated, even to skeptics, that Western economies are in decline. Germany’s export-based economy can’t manufacture vehicles or industrial equipment without access to Russia’s iron ore and energy. The more dependent any individual nation is on unfettered access to global trade, the more fragile its economy is.
Biden’s unprecedented sanctions, his “nuclear option” weaponization of the dollar, blew up NATO economies.
The natural-resource-wealthy Russia simply found non-NATO markets for its products. BRICS nations overall are wealthier than before, less dependent on the West.
The BRICS event this year was a reminder that the West is in economic decline.
The debut of the BRICS buck
At that same meeting, Putin called for an alternative international payment system and passed around a mock-up of what he called a BRICS “bank note.”
President Vladimir Putin presents banknote of a single #BRICS currency, which will replace the dollar. pic.twitter.com/gYBBLQo5L0
— Amitabh Chaudhary (@MithilaWaala) October 23, 2024
The paper note was purely symbolic, but its presence at the summit started an uproar within the establishment media.
Pundits were quick to “fact check” the story and declare that this was not a real unified currency announcement. Even BRICS officials went on record:
“The currency that President Putin is holding is a mock-up of a BRICS bill at the Kazan summit presented to him by enthusiasts and not an officially adopted BRICS currency note.”
It’s important to understand that this firestorm was sparked by a handful of photos of Putin proudly showing off what was nothing more than a graphical mock-up to his colleagues. That’s it. There was no official announcement, no indication whatsoever that the BRICS bill was anything but an exercise in creativity.
The subsequent outrage, though, was telling. I think it’s quite clear to the West just how precarious their globally-dependent economies are to disruption.
They’re scared. And should be.
The truth is that a real multilateral currency system cutting out the dollar is MUCH closer than most people know.
Putin flashed that banknote around because this is something the BRICS have been working on for well over a decade.
Trump understands what’s at stake
Donald Trump in particular seems to understand quite well that the BRICS currency concept is not a bluff or a joke.
In a recent social media post, Trump threatened to increase tariffs for any nation that tries to diminish or replace the dollar’s global reserve currency status.
The Kremlin responded with a warning that Trump’s efforts to reinforce the dollar would backfire.
Kremlin spokesman Dmitry Peskov said the dollar was losing its appeal as a reserve currency for many countries, a trend he said was gathering pace.
“More and more countries are switching to the use of national currencies in their trade and foreign economic activities,” Peskov told reporters.
If Washington resorted to “economic force” to compel countries to use the dollar it would backfire, he predicted.
“If the U.S. uses force, as they say economic force, to compel countries to use the dollar it will further strengthen the trend of switching to national currencies (in international trade),” said Peskov.
“The dollar is beginning to lose its appeal as a reserve currency for a number of countries.”
Overall, Peskov is right.
Any move to force the dollar onto developing nations as a reserve currency will only result in them dumping it faster.
Tariffs act as leverage for short term adjustments to trade imbalances, but they aren’t going to be effective in preventing other countries from using alternative currencies.
The problem with the dollar as global reserve currency
The problem with the dollar reserve system is its foundation.
Officially established with the Bretton Woods Agreement in 1944. Near the end of World War II, the agreement underlying the dollar was that the U.S. would get the economic benefits of global reserve currency status, but at a price.
In exchange, America would be required to carry the bulk of military defense obligations for allies around the globe. Five years later in 1949 NATO would be established and the U.S. would pay two-thirds or more of the alliance’s total funding for decades to come.
NATO was formed explicitly “to provide collective security against the Soviet Union” and later, after the creation of the Warsaw Pact, security against the USSR’s satellite states.
From the beginning, NATO and Russia were adversaries. In recent years, NATO bullying has pushed more and more nations away from the west, into the welcoming arms of the BRICS alliance.
The world is increasingly lining up into one of two camps: NATO or BRICS. West or East.
BRICS can never be truly independent of the West so long as they rely on the dollar for trade, though. A lesson Biden’s misguided financial sanctions made all too clear…
Now, there’s no agreement or treaty requiring developing nations to use the dollar for trade. Only precarious import/export arrangements that can fall apart quickly if conflict arises.
And let’s be honest, the sparks of wider conflict are everywhere. At my current count, there are at least three regional proxy wars going on simultaneously. Any of these could be the flashpoint that sets off World War III:
- Russia (with support from Turkey, Iran and North Korea) vs. Ukraine (with support from NATO)
- Israel (with support from U.S.) vs. Hamas (with support from Iran, Lebanon and proxies like Hezbollah)
- The Syrian civil war (with dozens of proxy forces involved)
These are just the active conflicts…
Then there’s China’s ongoing brinksmanship over Taiwan.
North Korea’s incessant saber-rattling.
The mass protests teetering on the brink of civil war in Georgia regions that are constantly on the verge of going hot.
Now is not a time for geopolitical uncertainty.
We have to consider the steady decline of Western Europe, with Germany and France now in governmental limbo, not to mention the UK turning into an Orwellian nightmare state.
Americans are so insulated from the global crisis that’s unfolding that I worry millions will be caught completely off guard when it finally arrives on our doorstep.
That’s why I write articles like these. Not because I enjoy it – but to remind my fellow citizens that, despite the Atlantic and Pacific oceans, we live in a complex and hazardous world.
To be sure, we have our share of crisis already.
The U.S. economy is not ready for this
A third year of stagnation and high inflation. There’s a plausible case that our economy has been in recession since 2022. Prices will not be coming down.
The illegal immigration crisis is coming to a crescendo and we’re all waiting to see if the Trump Administration follows through on their promise of mass deportations.
Then there’s our incredible debt crisis… Our government has added $6 trillion to the national debt in the past two years alone! We are creating more than $1 trillion in new debt every 3-4 months and our debt-to-GDP ratio is 124%. For context, that’s about the same as in 1945, after four years fighting World War II.
To call this simply “unsustainable” is an understatement. This is a debt crisis.
That said, we haven’t experienced any significant economic disruptions yet. The loss of the dollar’s reserve status would bring historically devastating consequences, and that’s only if our country devises a plan to weather the storm.
Conflicts between East and West are only going to grow given the existing conditions. The efforts to set up a non-dollar alternative currency will continue.
There’s not much Trump can do about that.
We also have to keep in mind that there are globalist institutions like the IMF and BIS that are, as I write this, getting ready to introduce CBDCs and cashless systems that would, ostensibly, limit the dollar’s global influence by default.
When globalists pontificated endlessly about a Great Reset during the pandemic era, what they were talking about was primarily an economic reset and a currency reset. There cannot be a global currency reset without the dollar being demoted.
They know it, and they aren’t going to warn the rest of the public about it.
Dollar dominance will wane faster
Everything is working against the dollar right now, and there’s a lot of people out there who question whether it’s even worth saving.
The Federal Reserve has been the source of considerable corruption within our government and I have often referred to central bankers as economic suicide bombers. But the dollar is all we have until a tangible safety net can be established.
Instead of focusing on trying to intimidate the BRICS into sticking with the dollar, Trump should be drafting a plan to backstop our currency system with hard commodities to prevent greater inflation and ensuring that the U.S. has the capacity to manufacture all our necessities domestically. Trump has expressed interest in returning to a gold standard – that’s hopeful, at least. But I don’t think there’s sufficient political will to make such a vital change without a crisis. The trick for you and me is to make sure we’re prepared to weather that crisis with our financial freedom intact…
There is a chance this could be done under Trump; there was zero chance it would have been done under Kamala Harris. So, at least there’s hope.
At bottom, it’s impossible to keep the dollar in a position of global dominance when every element of geopolitics is working against it and the very globalist organizations that helped create the Bretton Woods system are now trying to dismantle it.
It’s time to localize, build redundancies, build a financial bunker and get ready for the greater crisis at hand. Because there’s not much we can do to stop it.