Analyst Discusses US-BRICS Power Shift — Warns of Dollar Dominance Ending

A assume tank analyst says the U.S. greenback’s dominance could also be coming to an finish as international locations place themselves for a brand new worldwide system. “As the reliance on U.S. dollars diminishes, central banks will begin dumping their dollar reserves. This will result in hyperinflation, a spike in interest rates to compensate for the loss of purchasing power, and falling asset prices, further accelerating U.S. decline,” he described.

Analyst Says ‘Dollar Dominance May Be Coming to an End’

Lowy Institute, an unbiased worldwide coverage assume tank, printed an opinion piece titled “De-dollarization: shifting energy between the US and BRICS” on Aug. 3. The article is authored by Michael Roach, a administration marketing consultant and researcher for the institute.

“Will a new global reserve currency threaten the greenback’s supremacy? The short answer is yes,” Roach started. The analyst predicted:

The greenback dominance could also be coming to an finish.

He detailed that when Saudi Arabia and Russia signed a navy cooperation settlement in 2021, the unique position of the U.S. as “the sole protector of the Saudi Kingdom” ceased to exist. In addition, he noted that at this year’s World Economic Forum in Davos, Saudi Arabia’s Finance Minister Mohammed Al-Jadaan announced that his country was open to trading in other currencies besides the U.S. dollar. Noting that this is “something they haven’t done in nearly 50 years,” he emphasised: “The indicators of de-dollarisation have been rising.”

The analyst additionally talked about that through the 2022 BRICS summit, Russian President Vladimir Putin introduced that the financial bloc was working to create an “international reserve currency.” There has been speculation that the BRICS nations’ common currency will be backed by gold. However, Leslie Maasdorp, vice president and chief financial officer of the New Development Bank, also known as the BRICS Bank, said last month that the development of anything alternative to the U.S. dollar is “a medium to long-term ambition.” The BRICS nations are Brazil, Russia, India, China, and South Africa.

The Lowy Institute analyst also explained that central banks are already stockpiling gold reserves. Referencing the International Monetary Fund (IMF) Currency Composition of Official Foreign Exchange Reserves (COFER), he stressed: “Countries are positioning themselves for a new international system.”

While declaring that de-dollarization is happening, he mentioned “it is not something unique.” Roach defined: “The rise and fall of empires and reserve currencies are obvious all through historical past — from the Dutch Empire and the guilder to the British Empire and the pound sterling, and now the U.S. Empire and the greenback. There will inevitably be a shift on the earth order, and it could be the BRICS’ time,” he opined.

The analyst concluded:

As the reliance on U.S. {dollars} diminishes, central banks will start dumping their greenback reserves. This will lead to hyperinflation, a spike in rates of interest to compensate for the lack of buying energy, and falling asset costs, additional accelerating U.S. decline.

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