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November 22, 2022
The Dollar's Days Are Numbered - - China Stockpiling Gold, While BRICS-Allied Nations Bypass Using The Greenback In Trade Will Cost America The World Reserve Status
For the sake of clarity let us start with terminology that most ANP readers, if not all, already know.
BRICS is an acronym for five leading emerging economies: Brazil, Russia, India, China, and South Africa.
The BRICS payment system is described in the following manner:
A payment system that would be an alternative to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system. Russian Deputy Foreign Minister Sergey Ryabkov stated in an interview, "The finance ministers and executives of the BRICS central banks are negotiating ... setting up payment systems and moving on to settlements in national currencies. SWIFT or not, in any case we’re talking about ... a global multilateral payment system that would provide greater independence, would create a definite guarantee for BRICS."
Next up, World Reserve Currency, the works of which are adequately shown in the visual below:
SANCTIONS AGAINST RUSSIA WEAKENS THE US DOLLAR
Starting with the BRICS because other countries than those five have joined the BRICS payment system, and with the American-led sanctions against Russia, more countries are now joining that system in order to do business the with Russia.
Every time a deal is done using the BRICS system, or other payments systems created by other countries, it weakens the US dollar aka the Greenback. .
Previously we have seen reports of Saudi Arabia, Turkey, Egypt and other nations applying to join the BRICS payment system, but since the American-led sanctions have made it more difficult for countries wanting to maintain business with Russia, we see more than a dozen different countries asking to join.
More than a dozen countries have expressed an interest in joining the BRICS group, which incorporates some of the world’s major emerging economies, as the bloc gains more global standing, Russian Foreign Minister Sergey Lavrov said on Tuesday.
Speaking at a meeting with his Indian counterpart Subrahmanyam Jaishankar, Lavrov indicated that membership of the BRICS bloc is in high demand.
“The interest in this global association is very, very high and continues to grow,” he said. He confirmed that “more than a dozen” countries are eager to join, including Algeria, Argentina, and Iran.
The U.S. has been weakened in the eyes of the international community as evidence by how many nations, and companies continue to do business with Russia despite U.S. pressure to isolate Russia.
Businesses from Turkey, China and India have taken the least action in Russia among G20 nations
The longer the War between Russia and Ukraine continues the more businesses and nations are less likely to continue to heed U.S. warnings, and the more American attempts to pressure those countries, the more will continue to thumb their nose at a weakened America.
During a time of systematic, 'big tech' censorship and widespread institutional corruption, truth-seeking media and alternative views are crucial, and EVERY little bit helps more than you could know!)
REPORTS: CHINA STOCKPILING GOLD
Headlines from November 22, 2022, from multiple outlets, tell us that China is likely stockpiling gold to lessen dependence on the American dollar.
Seeing how Russia has been hit by monetary sanctions by the West, China and some other countries must be hurrying to reduce dependence on the dollar, analysts reckon.
Central banks bought a net 399.3 tonnes of gold in the July-September period, more than quadrupling on the year, according to the November report by industry group the World Gold Council. The latest amount marks a steep jump from 186 tonnes in the preceding quarter and 87.7 tonnes in the first quarter, while the year-to-date total alone surpasses any full year since 1967.
Buyers such as the central banks of Turkey, Uzbekistan and India reported purchases of 31.2 tonnes, 26.1 tonnes and 17.5 tonnes, respectively. The problem is that such specified buying adds up only to roughly 90 tonnes -- meaning it is unclear who bought the remaining roughly 300 tonnes net.
Some unidentified purchases are to be expected, but an unspecified slice of "this magnitude is unheard of," said Koichiro Kamei, a financial and precious-metals analyst.
They state: "China has also been selling its holdings of US bonds recently. According to the United States Treasury Department, it sold $121.2 billion in United States debt, roughly the equivalent of 2,200 tonnes of gold, between the end of February — immediately after Russia’s first attack on Ukraine — and the end of September."
THE DOLLAR HAS OUTLIVED ITS RESERVE STATUS
Only two currencies that were used as a World Reserve Currency, kept that top spot, which offers the country of that currency a number of perks and advantages, for more than 100 years.
Those benefits include the following, via Gold Alliance:
• Keep transactions costs low
Since the US is issuing the currently used reserve currency, our transaction costs are reduced. We don’t have to exchange our dollar for another currency to trade — that burden, and the exchange cost, lies on our trading partners.
We are also not exposed to the same level of exchange rate risk, especially when it comes to commodities, which are often quoted and settled in dollars.
• Boosted liquidity
When more companies and individuals are using the dollar, it means more transactions are denominated in dollars. This boosts the dollar’s liquidity: financial assets can be priced more easily, and loans are more easily provided.
In short, US companies get easier access to capital because of the dollar’s reserve status. Those companies can employ you or a family member, for example, so the dollar’s status is a benefit to you as well.
• Easily exported debt
Another privilege of the dollar being the world reserve currency is the fact that it becomes easier for the United States to export its debt. Being a world reserve currency puts the dollar in higher demand because of the trust in the dollar.
This makes dollar-backed securities (e.g., US Treasury bonds) more attractive. Countries tend to buy these dollar-backed bonds to increase the credibility of their own money supplies. The sales of these bonds fund our needs and lifestyle.
Every currency that has been named and used as the World Reserve Currency has had an end date, and the U.S. Dollar is no exception. Whether this year, next, or a decade, is dependent on the strength of the nation and the currency itself, both of which are weakened.
Spain kept it for 110 years, from 1530 to 1640, and Britain for 105 years, from 1815 to 1920 before the U.S. dollar because the Reserve Currency.
The average for how long a nation's currencies lasts as the Reserve Currency, before the Greenback took the top spot, is 73 years.
We are now past the 80 year mark, and while we should have been able to continue for a couple more decades, the weakened standing of America, along with the amount of our national debt, indicates the U.S. dollar may not last much longer as the World Reserve Currency.
Especially since the U.S. dollar is no longer backed by gold.
The major problem with the dollar being the preferred reserve currency in the world is that we have been spending beyond our means. We’ve taken to bailing out banks and big businesses when crises hit them.
We also sent billions in support to our citizens during the COVID pandemic and roughly $800 million to support Ukraine against Russian invasion. Although these are undoubtedly noble causes, to do all this, we’re increasing our money supply and along with it comes inflation. We believe in the strength of the dollar and take it for granted that other countries will keep believing in the dollar as well. Thus, we’re not worried about debasing the dollar through money printing.
How could your standard of living change if the dollar gets replaced as the world reserve currency? Short answer: More inflation.
The weaker America, and the U.S. dollar becomes throughout the international community, the closer America becomes to losing the World Reserve Currency status, and the BRICS, along with other payment systems that bypass the U.S. dollar, and China's selling of U.S. debt and stockpiling of gold, it appears that our weakened status is encouraging others push us closer to losing our status as the World Reserve Currency.
There is a price that must be paid to the continued out-of-control spending, the national debt and no longer adhering to the gold Standard.
Video below description:
The world's largest oil producer Saudi Arabia, is reportedly asking to join the BRICS group. The regional bloc, comprising Brazil, Russia, India, China and South Africa, has been touted as a serious counterweight to the western led world order. Just a week ago during his visit to Riyadh, South African President Cyril Ramaphosa announced that Crown Prince Mohammed bin Salman expressed the kingdom's desire to join BRICS. Saudi Arabia, home to 17% of the world's proven oil reserves, maintained close security and economic ties with the US for decades. But since the election of Joe Biden, Riyadh has steadily moved closer to US rivals like Russia and China. Earlier this month, the oil producing cartel OPEC+, announced it would cut oil production by two million barrels a day. The US blasted Saudi Arabia for the move, saying it would directly support Russia and hurt US consumers ahead of next month's midterm elections. The BRICS countries, have long called for new financial centres to counteract US dominated institutions like the IMF and World Bank. Would Saudi Arabia's inclusion into the group help BRICS achieve that goal?
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