Posted on 07/08/2023 7:22:04 AM PDT by Enlightened1
In an op-ed posted on The Daily Reckoning on Tuesday, former CIA and Department of Defense advisor and investment banker James Rickards predicted that August 22 will be the day the U.S. dollar’s status, as the world reserve currency and medium for exchange will formally collapse.
Many factors are worth considering, including the weaponization of the dollar against Russia’s economy amid the conflict in Ukraine, the U.S.’ own national debt of $31 trillion, and recent talks on the part of the BRICS+ group to create an alternative trade and reserve currency that would rival the dollar.
“On August 22, about two-and-a-half months from today, the most significant development in international finance since 1971 will be unveiled,” Rickards writes in reference to the upcoming BRICS+ Leaders Summit which will unveil plans for substituting the dollar in global trade.
What is interesting to note is that on that same day in 1971, August 22 was also the day the U.S. dropped the gold standard. “It involves the rollout of a major new currency that could weaken the role of the dollar in global payments and ultimately displace the U.S. dollar as the leading payment currency and reserve currency,” Rickards added, noting that the shift could span over a period of “just a few years.”
Rickards says the push for a new currency spearheaded by the BRICS+ group will “affect world trade, direct foreign investment and investor portfolios in dramatic and unforeseen ways,” and cause an “unprecedented […] geopolitical shockwave.”
He also said that the BRICS+ plans for expansion are “the most important development of the BRICS system,” noting that eight countries have so far already applied for membership, along with twelve others expressing an interest in joining the bloc, including Saudi Arabia, which assisted the U.S. in propelling the dollar currency to the status of world hegemon through establishing the petrodollar system.
“There’s more to this list than just increasing the headcount at future BRICS meetings,” Rickards emphasized, pointing out that “if Saudi Arabia and Russia are both members, you have two of the three largest energy producers under one tent (the U.S. is the other member of the energy Big Three).”
On another note, the BRICS countries make up 30 percent of the world’s surface, with 50 percent of global wheat and rice production, and 15 percent of the planet’s gold reserves. It accounts for 40 percent of the world population, 28 percent of nominal GDP (pending Saudi Arabia’s membership), and 52 percent is measured under the PPP formula.
“By every measure—population, landmass, energy output, GDP, food output, and nuclear weapons—BRICS is not just another multilateral debating society. They are a substantial and credible alternative to Western hegemony,” Rickards said.
Accordingly, when the bloc launches its new currency, it will not simply “fall on an empty field,” but be integrated “into a sophisticated network of capital and communications,” which should “greatly enhance its chances of success,” he argued.
Elsewhere in the op-ed, Rickards said that the BRICS currency is expected to be pegged to a basket of trade commodities or gold, and will likely appear in the form of a digital currency instead of paper money.
He also said that chances for success for the BRICS currency to replace the U.S. dollar will depend on the formation of an alternative to the U.S. bonds market which is seen as the safest bet to safeguard assets value.
“The key is to create a BRICS+ currency bond market in 20 or more countries at once, relying on retail investors in each country to buy the bonds. The BRICS+ bonds would be offered through banks and postal offices and other retail outlets. They would be denominated in BRICS+ currency, but investors could purchase them in local currency at market-based exchange rates. Since the currency is gold-backed it would offer an attractive store of value compared with inflation,” Rickards writes.
He added that “if the BRICS+ use a kind of Liberty Bond patriotic model, they may well be able to create international reserve assets denominated in the BRICS+ currency even in the absence of developed market support. This entire turn of events—introduction of a new gold-backed currency, rapid adoption as a payment currency, and gradual use as a reserve asset currency—will begin on August 22, 2023, after years of development.”
The collective push to replace the U.S. dollar as the world reserve currency has much to do with Washington’s “weaponization of the dollar through the use of sanctions,” Rickards writes.
“On numerous occasions from 2007-2014, I warned U.S. officials from the Treasury, Pentagon, and intelligence community that overuse or abuse of dollar sanctions would lead adversaries to abandon the dollar to avoid the impact of sanctions. Such abandonment would lead to the diluted potency of sanctions, unforeseen costs imposed on the U.S., and eventually to the collapse of confidence in the dollar itself. These warnings were mostly ignored. We have now reached the first and second stages of this forecast and are dangerously close to the third,” the observer wrote.
Western sanctions imposed on Russia in 2022 have particularly hastened the process of de-dollarization, causing “many other nations” to realize that “they could be next if they run afoul of the U.S. on certain issues.”
In sum, Rickards predicted that the process of de-dollarization could occur at a “much faster” pace than he previously expected, owing to the fact that several countries are opting to carry out trade and financial transactions in local currencies, but also because of the “growing strategic relationship” between Beijing and Moscow “as the two superpowers jointly confront the U.S.”
What you can be stockpiling is durable goods that you will use in the future—because you do not want to be paying inflated prices for them down the line.
That approach already saved me a lot of money during the current inflation.
Also, learn to garden, brew deer and wine (hold hard liquor for barter), keep weapons for defense and hunting, form a trusted community just for starters.
Time is getting short.
I can’t wrap my head around all the possibilities here, either.
But, an image from one of my favorite children’s books come floating from the back of my memory.
It was a very big Gulliver, lying on the ground surrounded by many tiny Lilliputians carefully pinning him to the ground at many points around his massive body with pegs and rope.
I can see the USA as Gulliver at this point in our history, unable to move out of the mess we ourselves have allowed to happen. And the Lilliputians being those small minded individuals within our nation, and the many forces outside of our nation who are fed up with our corruption and interference in their affairs.
Just another prediction.
Wonderful.
Two weeks. Hmmmm.
Financial institutions open on Monday morning.
To get a jump on the collapse of the dollar, be the first in line at the bank and convert all your assets from dollars to rubles and rands.
“Ex-CIA Advisor Predicts Date When U.S. Dollar Hegemony Will Collapse (August 22nd, 2023)”
Who cares if the US Dollar is no longer the world’s reserve currency and the value of the dollar CRASHES. All that matters is UKRAINE!!!, UKRAINE!!!, UKRAINE!!!.
(Neocon response)
James has predicted a lot of things.
Two weeks?
No this really happening. Just search and read about the BRICs, and check out the latest news.
I know the Praetorian Guard (aka the media) did not tell you this, but it is very real.
No, Republicratsonomics.
Well, if there’s a silver lining to this potential pile of dog crap it’s that this would probably put an end to this “climate change” bullsh!t.
Quantaloos.
If China has veto power on this novel thing (and they will) EVERYTHING about it will be on their terms. That equals instant unreliability, as they will NEVER submit to any outside, authentic auditing.
The damned thing may come about; but it is doomed.
But the Humpty-Dumpty scenario will have set in. Good luck putting all the broken pieces back together.
It’s complicated for me, but I kinda get your premise.
” All the BRICs [nations] run mercantilist economies, so how will that happen? The best you could get is a Chinese controlled Yuan trading bloc where Chinese loans get recycled by making imports from China. “
But, if that’s accurate then how should we assess the industrial recession of the USA and all the West, particularly the former glory of German genius for manufacturing and unprecedented advances in multiple sector.. car engines, aircraft to lenses for eyeware? Just wondering.
Fuel and energy deficits paralyze Germany, as it is an inland nation.
Those are self imposed. One of the biggest problems caused by globalism is that it insulates local elites from the local consequences of the bad decisions they make. For example, German industry has lots of plants in eastern Europe and China now. They also export a lot of output directly to other EU countries. To put it bluntly, they don't need German consumers to be well paid to still have lots of customers. They can shaft them out of jobs, force local wages down, etc. We have a very similar problem. As local wages and consumption are depressed, with lower sales volumes the elites can still make more money by further outsourcing, raising margins on fewer sales.
Writing Aug 22 on my calendar... don’t know why.
There won’t be a US dollar after 2032. Only nine years to go.
Can he also give us the date JC comes back to earth?
The neocons are facing at least two very bad things:
The 2024 election
The collapse of the dollar
Let’s see...what is the neocon go-to play....oh, yeah it’s war and/or terror. Maybe biological/chemical/nuclear terror, at that.
Make it bad enough so that a ‘state of extreme emergency’ can be sold to the public. Too much of an emergency to have elections. Too much of an emergency for BRICS to get any traction with their replacement currency, at least in the short term.
Yeah, that’s it.
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