Dedollarization advocated by BRICS: A threat to three key sectors of the United States

The BRICS plan to move away from dependence on the US dollar will significantly affect the United States. An effect which, according to analysts, will affect three vital sectors of the American economy, notably banking and finance, technology and commerce. This is without taking into account the consequences that a debt crisis would have.

A BRICS plan that will harm the American economy

The United States literally has no interest in seeing the BRICS dedollarization plan succeed. Because if this ambition comes to fruition, the American economy would suffer very heavily, particularly in three strategic sectors.

First, the banking and financial sector. Analysts believe that a drop in demand for US dollars in international transactions, as desired by BRICS, would lead to a slowdown in foreign exchange markets.

However, banks and financial institutions that rely heavily on foreign exchange activities would be affected. Which could cause hyperinflation in the United States due to the repatriation of the greenback rejected by the BRICS and their allies.

Second, this abandonment of the dollar would exacerbate the difficulties of the technology sector due to the inflation it would trigger. This prospect would compromise the competitiveness of American firms, which would then face high costs to maintain their activities.

Third, consumer staples in the retail sector will likely experience significant price increases in the United States. A direct consequence of the increase in inflation linked to the devaluation of the American currency. The debt crisis could make the situation worse.

The threat of a debt crisis on the American economy

Beyond dedollarization, the American debt crisis alone seems to represent a very significant threat to the American economy. The situation is such that Larry Fink, CEO of BlackRock, recently sounded the alarm.

For him, the American debt crisis which is looming on the horizon could spell the end of the American dollar. As a reminder, the United States debt is estimated at $34 trillion. This raises concerns, especially as the status of the dollar as the world's reserve currency is called into question.

Larry Fink pointed out that a highly indebted America would struggle to combat inflation, which would worsen the already unsustainable debt burden. In this context, central banks are diversifying their holdings away from the dollar in anticipation of a potential collapse.

The concerns of the BlackRock boss are also echoed by other financial leaders. Notably Jamie Dimon, the CEO of JP Morgan, who called the debt issue a “the most predictable crisis in history”.

With debt reaching unprecedented levels, the United States risks facing catastrophe in the years to come. There is therefore a vital issue for them in trying to block the BRICS exit project from the dollar which, it must be said, is on the rise.