How BRICS+ Could Collapse The Dollar & Topple U.S. Global Power

The Rise of the BRICS+ Alliance

The BRICS+ alliance, comprising Brazil, Russia, India, China, South Africa, and an expanding group of emerging economies, has been gaining significant momentum in recent years. This coalition of major developing nations represents over 40% of the world's population and nearly a third of global GDP[1]. 

 

The driving force behind the BRICS+ is a shared desire to challenge the long-standing dominance of the United States dollar in the global financial system. The member countries have been actively pursuing initiatives to reduce their reliance on the US dollar and promote the use of alternative currencies in international trade and investment[2].

 

Diversifying Away from the US Dollar

One of the key strategies employed by the BRICS+ is the promotion of bilateral trade agreements that bypass the US dollar. For example, China and Russia have established a payment system that allows them to conduct trade in their own currencies, the renminbi and the ruble, rather than using the US dollar as an intermediary[3]. This trend has been observed in other BRICS+ countries as well, with India and Iran conducting oil trade in rupees, and Brazil and China exploring the use of their own currencies for bilateral trade[4].

 

Establishing a BRICS+ Currency

The BRICS+ alliance has also discussed the possibility of creating a shared reserve currency, often referred to as the "BRICS currency" or "bric"[5]. The idea is to establish a currency that would be used for trade and investment among the BRICS+ countries, reducing their reliance on the US dollar. This move could potentially challenge the dominance of the US dollar in international transactions and undermine the United States' ability to exert financial influence through the dollar's global status.

 

Diversifying Foreign Exchange Reserves

In addition to reducing their use of the US dollar, the BRICS+ countries have been actively diversifying their foreign exchange reserves. China, for instance, has been steadily reducing its holdings of US Treasuries, while increasing its investments in other assets, such as gold and the currencies of its trading partners[6]. This shift in reserve management could further weaken the demand for the US dollar, potentially leading to a decline in its value.

 

Implications for the US Dollar and Global Power Dynamics

The BRICS+ challenge to the US dollar's dominance could have far-reaching consequences for the global financial system and the balance of power between the United States and emerging economies.

 

Reduced Demand for US Treasuries

If the BRICS+ countries successfully reduce their reliance on the US dollar, it could lead to a decline in the demand for US Treasuries. This, in turn, could result in higher borrowing costs for the US government, potentially constraining its ability to finance its fiscal policies and maintain its global influence[7].

 

Shift in Global Economic Power

The erosion of the US dollar's status as the world's reserve currency could lead to a shift in global economic power. As the BRICS+ countries gain more influence in international trade and finance, they may be able to shape global economic policies and institutions in a way that better aligns with their interests, potentially diminishing the United States' ability to dictate the terms of global economic governance[8].

 

Geopolitical Implications

The decline of the US dollar's dominance could also have significant geopolitical implications. The US has often used its control over the global financial system as a tool of foreign policy, imposing economic sanctions and restricting access to the US dollar-based financial system. If the BRICS+ countries succeed in creating alternative financial infrastructure, it could limit the United States' ability to wield this type of economic influence, potentially reducing its global leverage[9].

 

Conclusion

The rise of the BRICS+ alliance and its efforts to challenge the US dollar's dominance in the global financial system represent a significant shift in the global power dynamics. While the US dollar's status as the world's reserve currency has long been a source of strength for the United States, the BRICS+ countries' pursuit of alternative currencies and financial mechanisms could potentially undermine this position.

 

The implications of this shift are far-reaching, ranging from reduced demand for US Treasuries and higher borrowing costs for the US government to a potential realignment of global economic power and a diminished ability for the US to exert financial influence on the international stage.

 

As the world continues to evolve, it is crucial to closely monitor the developments within the BRICS+ alliance and their impact on the global financial system. The future of the US dollar's dominance and the balance of power in the global economy hang in the balance.

[1] [BRICS+ article]

[2] [BRICS+ de-dollarization article]

[3] [China-Russia trade in local currencies article]

[4] [India-Iran oil trade in rupees article]

[5] [BRICS currency proposal article]

[6] [China's US Treasury holdings decline article]

[7] [Reduced demand for US Treasuries implications article]

[8] [Shift in global economic power article]

[9] [Geopolitical implications of de-dollarization article]

 

Citations:

[1] BRICS Alliance Challenges US Dollar Dominance - YouTube https://www.youtube.com/watch?v=AGdb6CLwSJE

[2] de-dollarization and global power shifts in new economic landscape https://brics-econ.arphahub.com/article/117828/

[3] US Dollar's Supremacy Challenged - The Commerce Society https://comsocsrcc.com/us-dollars-supremacy-challenged/

[4] A BRICS Currency Could Shake the Dollar's Dominance - Foreign Policy https://foreignpolicy.com/2023/04/24/brics-currency-end-dollar-dominance-united-states-russia-china/

[5] Shifting global dynamics: an empirical analysis of BRICS + expansion and ... https://www.tandfonline.com/doi/full/10.1080/23311886.2024.2333422

[6] What if the US dollars supremacy erodes? - LinkedIn https://www.linkedin.com/pulse/what-us-dollars-supremacy-erodes-koviid-sharma

[7] Can BRICS dethrone the US dollar? It'll be an uphill climb, experts say https://www.aljazeera.com/features/2023/8/24/can-brics-dethrone-the-us-dollar-itll-be-an-uphill-climb-experts-say

[8] BRICS: Redefining Global Economics and Power Dynamics for the 21st ... https://strafasia.com/brics-redefining-global-economics-and-power-dynamics-for-the-21st-century/

[9] De-dollarization: The end of dollar dominance? | J.P. Morgan https://www.jpmorgan.com/insights/global-research/currencies/de-dollarization

[10] BRICS Economic Shift: Challenging the Dollar Dominance - Africa24.it https://africa24.it/en/2024/05/15/brics-economic-shift-challenging-the-dollar-dominance/

[11] BRICS Rises: A Changing Balance in Global Power? - Modern Diplomacy https://moderndiplomacy.eu/2023/12/13/brics-rises-a-changing-balance-in-global-power/

[12] Monetary Blowback: How U.S. Wars, Sanctions, and Hegemony Are ... https://theintercept.com/2023/06/07/intercepted-podcast-us-dollar-dedollarization/

[13] BRICS: US Dollar Dominance Gradually Fading - Watcher Guru https://watcher.guru/news/brics-us-dollar-dominance-gradually-fading

[14] The BRICS countries: where next and what impact on the global economy? https://www.economicsobservatory.com/the-brics-countries-where-next-and-what-impact-on-the-global-economy

[15] A new currency to dethrone the dollar? - CNRS News https://news.cnrs.fr/articles/a-new-currency-to-dethrone-the-dollar