Investors are eagerly awaiting the outcome of the highly anticipated BRICS 2023 meeting. What started out as a hodgepodge of mediocre economies has boomed into one of the most influential economic and geopolitical blocks in the world.
Watch this week’s The Gold Spot to hear Scottsdale Bullion & Coin Precious Metals Advisors Joe Elkjer and Damian White explain the rumors, agenda, and potential impact of this influential meeting.
Why the BRICS Matter
Brazil, Russia, India, China, and South Africa (BRICS) have been the subject of eye-catching headlines over the past few weeks as the nations prepare for an annual summit. However, many investors might be wondering why these countries command so much attention in the West. After all, isn’t it the G7 led by the United States that dictates world economics?
That was true a few years ago, but not anymore. Now, the BRICS nations wield immense economic power on the global stage with the power to change the status quo. These nations represent over 40% of the world’s population1, with India and China alone accounting for more than one-third2. More convincingly, the block generates 31.5% of global GDP3, which slightly outperforms the G7 – Canada, France, Germany, Italy, Japan, the UK, the US, and the EU.
The BRICS Summit 2023 Agenda
The momentum behind this economic titan is drawing attention to the group’s 2023 summit in South Africa. Next week, all the nation’s leaders will gather to discuss a host of domestic and international issues. Russian president, Vladimir Putin, is the only exception due to his international arrest warrant. Although the BRICS nations don’t publicize their meeting specifics, there’s been plenty of discussion from officials to glean some insights.
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Unsurprisingly, the biggest focus for the group will be to strengthen their domestic economies. Despite boasting a relatively large collective GDP, individual members of the group face unique challenges, including inflation and US sanctions. Still, some fear that China is simply using the group’s cooperation to further its end goal of global dominance.
Currently, the BRICS nations comprise only five nations, but the block is on the verge of expansive growth. Around 22 countries have officially petitioned to join, while over 40 nations have expressed interest. Saudi Arabia, a once-staunch American ally, is a notable potential member, along with several other oil-rich nations. Earlier this week, the United Arab Emirates accepted the first crude oil payments from India in Indian rupees in a blow to the petrodollar system. The more countries BRICS brings into the fold, the fewer allies the US has to uphold the dollar.
By far, the most influential (and controversial) piece of the summit’s agenda is the creation of a BRICS currency. This potential inter-country money system would ostensibly conduct trade and settle transactions between the BRICS nations. There have been conflicting rumors, with some officials saying the currency is a-go, and others claiming it’s not on the agenda. Regardless, the potential of a commodity-backed BRICS money system is a serious threat to the global economic system.
Global Demand: Falling Dollar & Rising Gold
The specifics and timeline of the BRICS proposal might be opaque, but the repercussions are crystal clear. The burgeoning economic block wants to be free of the stranglehold of Western influence, and the BRICS currency is their ticket out.
“The majority of the world measured by population and GDP is becoming confident enough to throw off the yoke of American imperialism, and with it will go the hegemonic power of the fiat dollar.”– research director at GoldMoney, Alasdair Macleod
The planned BRICS currency is rumored to be backed by gold, which would give it greater stability, security, and predictability than USD could ever offer. With a commodity-based competitive currency on the market, two outcomes would be inevitable: the dollar devaluing and gold prices rising.
The process of de-dollarization is off to a racing start as countries across the world decouple from US influence. A more reliable alternative currency would make the transition away from dollar hegemony much easier. We’re already seeing the transactions and reserves in USD reach new lows.
At the same time, central banks are scooping up gold in record amounts. Many of the BRICS nations, such as China and India, are among the most active buyers. If the BRICS currency were to topple the dollar, gold buying might skyrocket as economies would require the precious metal to run their economies.
The Central Bank Summit in September 2023
The central banking conference is another looming event on investors’ minds. Federal Reserve Chairman Jerome Powell will speak to the world’s most influential financial czars in Jackson Hole, Wyoming, to discuss the state of the world economy. We’ll have information on the results and impact of the meeting once it happens, but it’s something you should have on the radar.
Stay Informed to Stay Protected
The United States seems terrified of the potential BRICS currency not because of its relative strength but rather due to the dollar’s weakness. With record-setting inflation, widespread bank failures, a looming debt storm, and considerable devaluation, it’s safe to say this fiat currency experiment is a failure.
Robert Kiyosaki, famed investor and author of Rich Dad, Poor Dad, 🔮 predicts that prices of “gold and silver skyrocket” if the dollar buckles. The mounting pressure against USD is making that a likelier outcome with each passing day.
We’ve put together a FREE Petrodollar Report to help investors stay up to date on the latest events in the ongoing saga of the dollar’s decline. Request your FREE COPY of our Petrodollar Reports today!