‘Under major siege’: Dethroning the U.S. dollar of paramount concern as Russia kicks off BRICS Summit

While global tensions continue to escalate, Russia is hosting the BRICS Summit in Kazan Tuesday, where some of the world’s largest economies will be meeting to entrench a new global order, namely undoing the U.S. dollar.

BRICS is made up of several different nations, including Brazil, Russia, India, China, South Africa, Saudi Arabia, Iran, Ethiopia, United Arab Emirates and Egypt. According to Statista, combined BRICS nations make up over 45% of the world’s population and 35% of the global GDP.

Undoubtedly, one of the most powerful of the alliance is China, which accounts for almost two-thirds of the bloc’s exports and over half of the bloc’s 35% GDP. With the joining of oil-rich nations such as the United Arab Emirates and Iran, the bloc controls almost 30% of all global oil output.

The alliance between these nations has sent alarm bells off, as the U.S. dollar is threatened with losing its leading spot in global finance. The de-dollarization of the U.S. would lead to a shift in global power, largely affecting the U.S. and its financial markets, especially given the rising debt of the U.S. economy which is currently far outspending revenue.

According to a report from Fortune, Nassim Nicholas Taleb, a scientific adviser at Mark Spitznagel’s Universa Investments and author of “The Black Swan,” a book about unpredictable events, there are grave concerns about the future of the U.S. dollar.

“So I’m really afraid of a progressive loss of the role of the dollar … People nominally conduct transactions in dollars, but they don’t store it in dollars, and that is what the problem is,” Taleb told Bloomberg TV.

Taleb noted he was worried about the actions of the Biden-Harris administration in 2022, which resulted in freezing Russian assets after Russia invaded Ukraine. Taleb called it a “confiscation,” and pointed out it will not boost confidence in investors.

“It may make sense from a justice standpoint, but you’ve got to remember, it’s not going to encourage people to invest in the system,” Taleb said.

Likewise, in June, E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget told the Daily Caller News Foundation the Biden-Harris administration’s move to freeze Russian-owned assets will not instill confidence that the U.S. is a safe investment.

“If the Biden administration were intentionally trying to destroy the dollar, I’m not sure what they’d do differently … His spendthrift agenda has resulted in the dollar losing one-fifth of its value in less than four years, and his international policies have done even more harm by eroding the dollar’s reserve currency status. By freezing and then eventually stealing dollars owned by foreigners, Biden sent a clear message to the world that the dollar is no longer a safe asset,” Antoni said.

Nevertheless, former President Donald Trump said during a rally in Mosinee, Wisconsin in early September that – assuming he is re-elected president – the U.S. dollar will remain the world’s currency, promising to punish countries who go the route of de-dollarization.

“We will keep the U.S. dollar as the world’s reserve currency, and it is currently under major siege, many countries are leaving the dollar. They’re not gonna leave the dollar with me. I’ll say, ‘You leave the dollar, you’re not doing business with the United States, because we’re gonna put 100% tariffs on your goods,'” Trump said.

Geopolitical analyst Pepe Escobar said during an interview with New Rules Podcast that the process of complete de-dollarization could take decades to happen; however, alternative payment systems are very close right now.

“Alternative payment systems, we are closer than ever. Full de-dollarization, it’s a long process and if you talk to the best economists from BRICS countries they say this is a process that could last decades … Because it implies you have to build a post-Bretton Woods system. Can you imagine a system that lasted almost eight decades, then you have to start from scratch with an alternative system? So you have to convince not only governments inside BRICS, governments outside BRICS, and big companies of BRICS nations and outside BRICS as well,” Escobar said.

Escobar noted it would be an enormous task to convince multinational companies that BRICS can offer a better system, when the one they already use works for them.

“In terms of alternative payment systems, it is already very developed because the BRICS are already trading among themselves in their own national currencies, and this will expand to multilateral trade inside BRICS with national currencies, and expand to what we call BRICS Plus,” he said.

The dethroning of the U.S. dollar will come over time, rather than come to a dramatic sudden end, according to Escobar.

“Just look at the trade balance between Russia and China, it’s already bypassing the U.S. dollar in practice, and this is something that happened for the past two years or so. So it can be done,” Escobar said.

BRICS SUMMIT IN KAZAN: THREE DAYS THAT CAN CHANGE THE WORLD

Alexander Dugin and Pepe Escobar join #NewRulesPodcast to discuss BRICS expansion, de-dollarization, and the roadmap for creating a multipolar world order.

(1:31) Geopolitical significance of 2024 BRICS… pic.twitter.com/EQ2AkTHmX1

— NewRulesGeopolitics (@NewRulesGeo) October 21, 2024