Has the USD hit a BRICS wall as the current world order rule-based, US hegemony is challenged by rising economic superpowers?
Darren Winters explores this fascinating question by taking a peek into the mindset of the rising powers in the East, Russia and China, who are masterminding a BRICS system of economic, financial and political cooperation between BRICS nations to foster trade, prosperity and peace between members.
The current new world disorder is rejecting US hegemony, a post-WW2 rule-based system, which was the golden years for the US, with USD as the world reserve currency.
A new system in the East is challenging this unipolar world as the US hegemony
BRICS (Brazil, Russia, India, China and South Africa) cooperation has expanded from 5 countries to 11, with Russia taking the presidency in 2024. BRICS is an economic, political, security, and cultural union among nations to strengthen economic and security ties.
BRICS is outside the US-centric world sphere of influence, leading to BRICS currency, as members will need to store their trade surplus imbalances in a currency other than the USD.
Paradoxically, weaponizing the USD, cutting nations from the SWIFT global payment system, and imposing trading sanctions have accelerated the superpowers, Russia and China, to develop a multi-polar system to rival and even one day threaten USD dominance as the world reserve currency.
China, Russia and India make a cocktail of tremendous economic and human brain power. Throw Iran and resource-rich Brazil and South Africa into the mix, and there is a gravitational pull towards the BRICS.
What is the alternative? The UK is a basket case, a case study on how not to run a country. Germany, the engine of Europe, is stumbling.
Europe’s industrial powerhouse can not survive without a plentiful supply of affordable Russian Gas. So, there goes the EU and possibly the Euro unless it pivots to Eurasia, the BRICS New Silk Road.
Moreover, the US appears politically divided and up to its eyeball in a public debt that keeps breaking records.
Can an Empire run the world when it struggles to remain functional within its borders?
The living standards of most citizens within the US Empire and its satellites are collapsing to levels not seen since the Great Depression.
No need for me to go on a poverty, rising crime rant, walk the street with your eyes open, and you will see a belly full of it.
USD hits a brick wall as the fiat system debases as greener pastures are sought.
Darren Winters points out that the satellites could experience the worst currency debasement.
GBP and Euro are losing value fast against the USD.
Less significant fiat-based currencies could lose the most purchasing power, triggering hyperinflation and a currency collapse.
GDP is concerning given that a labour government in 2024 often translates to higher taxation, public spending, and nationalisation which could weaken GDP.
Meanwhile, the USD hits a BRICS wall as bilateral cooperation between China and Russia is at the best level in history.
“This multilateral cooperation is an unstoppable trend,” said Russian President Putin in his first TV interview, since the Ukraine war in 2022. China is now Russia’s largest trading partner.
China and Russia are the masterminds of BRICS as the USD hits a BRICS wall
President Putin views BRICS based on a relationship of respecting mutual interests and where compromise is made to advance a greater common interest.
China-Russia trade is already vast, extending to agriculture, dairy, meat produce and Russian Gas to high-tech energy sector nuclear power plants on fast neutrons. Other industry sectors include automobiles, shipbuilding, aircraft manufacturing and electronics.
Bilateral trade between China and Russia is anticipated to reach $200 billion as trade volume increased by 32%.
Put simply, US trade sanction is accelerating BRICS, a sign of waning US hegemony.
What is the ideology of BRICS and the USD hitting a BRICS wall?
The Eurasian Economic Union, Belt and Road, also known as the New Silk Road is based on mutual economic trading benefits. “Trading is based not on coercion but opportunities;” said Putin.
Rule-based Order mocked by Putin as USD hits a BRICS wall
Have you seen these Rules? Never. Nobody has written down these rules. They have not been discussed and from a common sense view, this is nonsense. These are fabricated rules, as they see fit. This is what colonialists do. Colonizing powers have always seen themselves as first-class people. They claim to have brought enlightenment to the people of their colonies. They see themselves as civilised people bringing civilisation to second-class people.
It is no surprise that the political elites in the US tout American exceptionalism, which is a continuation of colonial thinking.
By saying America is exceptional, they imply everyone else is a second-class citizen, which is the remnants of colonial thinking.
Our premise is very different.
We start with everyone being equal and have the same rights,” said Putin. “The rights and customs of other countries are respected, which is how a multipolar world takes shape,” he added.
But how do you justify that by instructing your tanks and soldiers to invade a sovereign country, Ukraine?
“No one wishes to be a vassal of another country. Everyone seeks equal relationships,” said Putin.
The USD hits a brick wall as US hegemony is challenged, with the world standing at a crossroads to historic changes
Both independent systems have a concept of building a global community with a shared future and security.
President Xi Jinping proposed this concept when he visited Moscow in 2013.
A BRICS currency is inevitable.
So, what if the value of a BRIC currency is gold-backed, determined by a given weight of gold?
BRICS economies are production commodities based, so, logically, a BRICS currency will be gold-backed.
If US treasury yields keep rising, and so too do gold prices, the USD could wither on the vine.
What if investors prefer gold to treasuries?
The BRICS currency appreciates, the USD collapses, and the US is in checkmate with WW3 being the wild card.