The title says it all if you know what you are looking at. A little history first then we will dive into the relationships between BRICS, the Dollar and Interest Rates and it will wake you up if you haven’t been watching the world. BRICS is the formation of a new currency based on precious metals formed to take on the dollar as the world’s new reserve currency, we will get more into that in a minute. The Dollar is our currency in the United States and is the current world reserve currency. Then how do interest rates play into this equation you ask? Interest rates may not react now to both of these currencies now but they will very soon.
BRICS stands for Brazil, Russia, China, and South America, they were the original nations that signed on to use this new currency. Since the formation of BRICS, Several other countries have signed on to use this currency, countries such as Saudi Arabia, Syria, Afghanistan, and several others countries. What this means is that these countries will use the BRICS currency as their reserve currency, not the US Dollar. This has not materialized yet but it is in the works. If this new currency catches on and becomes the world’s reserve currency and not the dollar that could have to reach economic consequences for the Dollar. If you are paying attention to what is happening in Ukraine right now you have to understand that this conflict is not about Ukraine’s sovereignty from Russia it is about money. Money has driven almost all wars in history and this one is no different.
The Dollar has been the world’s reserve currency since World War 2 and before that, it was the Pound Sterling (British Currency). The Dollar was originally backed by Gold and Silver. When the US was limited to gold and silver it could not expand as fast as those that held the gold and silver wanted it to so it moved from a currency that could be backed by precious metals to the Federal Reserve Note we have today. That transition happened in 1971 under President Nixon. The US moved to what some call a “Petrol Dollar” which is a dollar backed by oil. Again, we have seen wars fought over oil now, why? Money. Today’s Dollar is really only backed by debt and that is why the world sees the dollar as a dead currency where the debt has exceeded what a normal mind can grasp. $33 trillion dollars is a number that is not quantifiable to a regular person, numbers like that are for mathematicians. The dollar has been the great magical vehicle for decades with people believing it has actual worth and that belief has allowed the US to become the largest superpower in the world.
Interest Rates, how does it play into the currency game? This one will take a history lesson as well. Interest Rates, by definition, are the cost of money. Interest Rates in the US have been controlled by the Federal Reserve and the Federal Reserve also controls the Money Supply. We can now see the relationship as the Federal Reserve controls both the supply of Dollars and the cost of the Dollar. The Federal Reserve system has been under fire lately with the way they have managed this relationship as we have seen interest rates soar over the last few years. With the dollar as the world’s reserve currency for so long the Federal Reserve Bank has been lucky that countries like China and other countries that hold a large stake in the US debt have not called it due. If the world moves away from the Dollar as a reserve currency you will see the devaluation of the dollar worldwide and those still using the dollar will see it be devalued on the world stage. A devalued dollar will create inflation and the cost of the money will have to go up to offset this. The cost of money is interest rates.
This is just a quick view of those things to come and can also explain what is going on in the world today. If you connect the dots you can see why BRICS has come to fruition. War in today’s world is being fought on the economic front not so much on the battlefield. If the BRICS currency takes over, the dollar will devalue and the cost of things in the US will skyrocket. If we have high inflation we will have high-interest rates. When you look at the conflict in Ukraine understand it is not about Ukraine at all, in fact, if you look at Ukraine you will find that their government has been corrupt for decades. If you research President Zelenskyy you will see he started off in life as a comedian and actor and worked for a TV station prior to being “elected” President of Ukraine in 2019. Zelenskyy’s net worth is estimated to be between $20 and 50 million US dollars, and some estimate it far greater than that. Meanwhile, the US has recently sent Ukraine over $120 Billion in aid. These are facts; you can even google it and see that the search engine has not yet closed the door on this information. It is on top of this administration’s list to keep the dollar as the world reserve currency to keep America the strongest and richest country in the world. When you are watching or listening to the news, however, you find your information, keep money in mind when watching as that is the underlying cause for almost every conflict in the world is money. I tried to keep this to facts that we know, but I think if you peel the onion back a bit more you will see things and understand things that you may not want to have knowledge of. There is a lot more to this that I can’t possibly go into for this short blog post so keep your eyes and mind open.