The BRICS are not skimping on the deployment of their exit strategy from the economic domination of the American dollar. The alliance’s monetary projects are attracting attention, particularly the massive funds they are pumping into large quantities of gold.
Towards a BRICS currency backed by gold?
We told you about the BRICS monetary plans to free themselves from American domination exercised via its currency. Ambitions which we said in previous articles could involve the crypto industry.
Without calling into question this envisaged option, the BRICS monetary plans seem to be taking a completely different direction. It seems that for 14 months, the Alliance buys gold with all its might. Which does not fail to arouse suspicion and spark speculation.
For example, for the year 2023 alone, China offered itself a staggering quantity of 225 tonnes, consolidating its position as the world’s leading gold investor. The question we can legitimately ask is what motivates the voracious appetite of the Chinese ogre for the precious metal.
The theory that seems to emerge in response to this questioning is to say that the BRICS would in fact work to issue a common currency backed by gold. An option that could oppose the powerful American dollar.
A not-so-obvious option to make happen!
The attraction of a “monetary shield” gold BRICS is undeniable. As for its feasibility, that’s a completely different kettle of fish. Because gold, despite its almost unalterable value, remains particularly sensitive to fluctuations in the money market.
This flaw means that a BRICS currency backed by gold would ultimately be somewhat vulnerable in the long term. This would risk undermining the objectives of the alliance of countries and its desire for monetary and financial autonomy.
But beyond these ambitions, other explanations can entirely justify massive investments in the precious metal. The latter is particularly useful in terms of diversification of reserves, a sacrosanct principle for central banks.
This, especially since in times of economic turbulence, gold remains one of the rare assets to protect its holders from financial disaster. Furthermore, given the current woes of the US dollar, the appeal of gold as a hedge against its potential weakening cannot be overlooked. In any case, the BRICS gold frenzy somewhat confirms the organization’s intention to free itself from traditional financial hegemony. This whatever the price.
Maximize your Tremplin.io experience with our ‘Read to Earn’ program! For every article you read, earn points and access exclusive rewards. Sign up now and start earning benefits.